The major issue I see at tax time is self-employed individuals do not understand that there is a Self-Employment Tax.
This tax is 15.3% on the profit of your SE business.
The tax is equal to what a W-2 employee and his employer pays into Social Security and Medicare.
So taxpayer drives for rideshare has $30,000 revenue and $10,000 expenses.
Profit is $20,000.
Taxpayer is married so Standard Deduction is $25,900 and spouse does not have income.
No Income Tax is owed.
However, $3,060 in Self-Employment Tax is owed.
Because of the potential for this negative surprise, I would not think in terms of a minimum income where you do not have to think about taxes.
If you have $400 or more in net earnings from self-employment, IRS requires you to file a tax return.
