Hi,
I wanted to clarify if the California employee classified as a federal independent contractor pertained to those who worked for Uber/Lyft/DoorDash folks. I was a California employee and sole proprietor of a small business, so I assume the above wouldn’t apply to me, is that corrrect?
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If you didn't get a W2 as an employee but got a 1099NEC then you are an independent contractor for both federal and state. Independent contractor, self employed, freelance, side jobs, gig work, consulting, sub-contractors are all the same thing. You need to fill out Schedule C for self employment and pay self employment tax on it.
Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment. You pay 15.3% SE tax on 92.35% of your Net Profit (If it is greater than $400). The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire.
Thank you for your response! This has lead me to ask another question from your response. How do you track your social security credit during your life?
You should be getting a Social Security statement every year. Or you can go online at https://www.ssa.gov/ to lookup your account. But if you have self employment income there will be a 1 or 2 year lag for it to show up.
Request earnings and employment info from Social Security
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