How does being self-employed affect my taxes?
For starters, you'll probably receive some different tax forms in the mail.
Form 1099-MISC or 1099-NEC reports money you earned doing work for a client or for a company as a nonemployee. Think of it as the self-employed equivalent of Form W-2. If someone paid you $600 or more for nonemployee work, they're required to send you a 1099-NEC.
Form 1099-K tracks income you made from selling goods or providing services via payment apps and online marketplaces. Examples include PayPal, Venmo, Square, Etsy, Uber, and eBay.
You should receive a 1099-K if you made more than $20,000 and the number of transactions exceeds 200 on one of these platforms.
Even if you don't receive a 1099-K, or you make less than $20,000, you still need to report all taxable income to the IRS.
You're required to report all self-employed income—including cash, checks, and electronic payments—even if you didn't get a 1099.
As a self-employed taxpayer, you'll also see some new forms on your tax return. We'll automatically fill these out for you in TurboTax.
Schedule C: This calculates your net profit or loss, which carries over to Schedule 1, line 3.
Schedule SE: This calculates your self-employment tax, which shows up on Schedule 2, line 4. You get to deduct half of it; that amount transfers over to Schedule 1, line 15.
1040-ES: We'll generate four of these estimated payment vouchers, one for each quarter, if (like many newly self-employed people) you didn't withhold or pay enough taxes throughout the year. These vouchers are for next year's return, in case you need them.
