If none of the following apply to you,
you may
Clear and Start Over
with your return to select a different software
version.
Sole
proprietor, independent contractor, consultant and freelancer are all terms
used to describe self-employed workers. Whether you do it full-time or on the
side—if you’re an independent worker like an Uber/Lyft driver, web designer,
tutor, or babysitter—you’re self-employed.
You
may not think of yourself as running a business, but you’re considered
self-employed if you engage in business-like activities.
Three
key factors that generally define an activity as a business:
- You intend to make a
profit (even if you operate at a loss).
- Your activities are
regular.
- You make efforts to
sustain or grow your business.
Situations
where you wouldn't be considered self-employed:
- You mowed your
elderly neighbor's lawn all summer, and he gave you money as a token of
his appreciation. (You didn't intend to make a profit.)
- You were paid to
tutor a friend's child, but you’re not going to do it again. (Your
activities are not regular.)
- You draw for fun,
and your friend paid you to create a poster for a birthday party. (You're
not making efforts to sustain or grow a business.)
When
you’re self-employed, you’re likely to receive a 1099-MISC or a 1099-K. Even if
you don’t receive these forms, you still need to report all your income from
self-employment.
