Unemployment to self employed

[Ppopp]

Hi,

I received unemployment benefits in the first part of 2021 and then accepted a FT contract position (self employed) starting at the end of August 2021. I know there's an upcoming event in October that focuses on self employment, but I'll be traveling and not sure if I'll be able to participate. My question is do I file my 2021 taxes via TurboTax under the self-employment model? If so, I'm assuming it will allow me to include unemployment earnings and the 10% tax I had chosen to be deducted already in addition to adding my 1099 and creating quarterly payments for 2022.

Thanks, 
Paula

[VolvoGirl · Accepted solution]

Yes to all.  The Self Employed version will handle all your personal tax return.

You will need to keep good records.  You may get a 1099NEC at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small.  You might want to use Quicken or QuickBooks to keep track of your income and expenses.

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return....

http://quickbooks.intuit.com/self-employed

When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.  You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

Here is some IRS reading material……

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses

http://www.irs.gov/pub/irs-pdf/p535.pdf

You pay Self Employment tax on $400 or more of net profit from self-employment in addition to any regular income tax.  You pay 15.3% SE tax on 92.35% of your Net Profit 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.  

[Ppopp]

Great information. Thank you for your help!