BillM223
Expert Alumni

Business & farm

People should not get hung up on the word "business".

 

The IRS says "Self-employment tax is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners." See Self-Employment Tax.

 

When you do work at events like this (even just one), you are doing so either as an employee or as a contractor. In either case, Social Security and Medicare taxes must be collected.

 

In the case of the employee, the employer collects the money for Social Security and Medicare and sends to the IRS. In the case of a contractor, the contractor is responsible for determining and sending the Social Security and Medicare taxes (called collectively "self-employment taxes") to the IRS.

 

The mechanism through which this is done by a contractor on the tax return is Schedule C and Schedule SE, which are the same forms that sole-proprietors use.

 

So the IRS uses the terminology of the contractor having a "business". It would be a mistake to think that "I don't have a business so I won't file Schedule C or I will defeat the purpose of Schedule SE by artificially setting the Schedule C net income to zero."

 

There are many times where the IRS terminology is not the same as normal English, but it is clear what the IRS's intent is.

 

Please file the Schedule C and pay the SE taxes, if any are calculated.

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