turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

jjeannie
Returning Member

Am I considered a sole proprietor or an independent contractor? Or is it possible to both? What is the difference and how will it affect the way I file taxes?

I am a self-employed dancer/entertainer that gets paid in cash. When getting hired at the club I do business at, I signed a contract that states I am an independent contractor. I don’t get a paycheck and don’t have an hourly wage. Every day I work, I pay the club a “house fee” to do business there, and tip out 10% of my earnings for the day when I am done working. I have been considering myself an independent contractor since then, but when reading self-employed tax articles and filling out my own information on TurboTax, I am basically being told I am a sole proprietor. Which is correct and is it possible to be both? What is the difference between the two and how will it affect the way I file my taxes?

I’ve attached an image below. All of the bullet points apply to me besides “receive other business income from sales.” And I am not entirely sure what “do 1099 contract work with existing businesses” means. Can someone explain?

Thank you!

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Reply
PhyllisG
New Member

Am I considered a sole proprietor or an independent contractor? Or is it possible to both? What is the difference and how will it affect the way I file taxes?

If you have not set up a business entity such as a LLC, partnership, or corporation, then sole proprietor and independent contractor are basically the same.  Either title will have to report their income and expenses on the Form 1040 Schedule C or Form 1040 Schedule C-EZ. Furthermore, the job titles will not make a difference on your tax return because the income tax and possible self-employment tax is computed on your net income.

Generally, doing work as independent contractor may include receiving a Form 1099-MISC with box 7 checked, or entering into a contract that stipulates that you are not an employee and are responsible for your own expenses and taxes.  

As a self-employed individual, you may generate your own income without a third party involvement in determining methods and prices. This would align with receiving other business income from sales.

When there are several occupations (e.g. artist, dancer) then you must file a separate Schedule C or C-EZ to report the income and expenses of each occupation. However, both forms are attached to your Form 1040. 

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question