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When you report self employed income on taxes, do you put how much the business made or how much you paid yourself?

 
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When you report self employed income on taxes, do you put how much the business made or how much you paid yourself?

When you are self-employed you do not pay yourself.  Your self-employment income is the net you receive after expenses.

When you report self employed income on taxes, do you put how much the business made or how much you paid yourself?

You need to report all your income even if you don't get a 1099Misc. You use your own records.  You are considered self employed and have to fill out a schedule C for business income.   You use your own name, address and ssn or business name and EIN if you have one.   You should say you use the Cash Accounting Method and all income is At Risk.   

 

Then you enter your expenses but not what you pay yourself.  Sole proprietors cannot take a withdrawal or salary and include it as an expense on their tax return. As a sole proprietor, you are not an employee of the business. You don't pay yourself or enter a salary or withdrawal for yourself. All the business income and expenses are your personal income and expenses in the first place. You just fill out a Schedule C. The net profit or loss is your income.  If you have a net profit of $400 or more on schedule C you will pay SE self employment tax on it in addition to your regular income tax. It's all included on your personal 1040 form.  

 

 

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