Where do I input income I made from my own business?
I'm using Self-Employed, but I don't see a section that allows me to
input money I paid myself. I am a massage therapist and pay myself per
service from my own business.
01206
1 Replies
VolvoGirl
Level 15
Jun 3, 2019 11:59:10 AM
Because you don't. You cannot deduct your own salary or any personal withdrawals you make from your business. As a sole proprietor, you are not an employee of the business.
Sole proprietors cannot take a withdrawal or salary and include it as an expense on their tax return. You don't pay yourself or enter a salary or withdrawal for yourself. All the business income and expenses are your personal income and expenses in the first place. You just fill out a Schedule C. The net profit or loss is your income. If you have a net profit of $400 or more on schedule C you will pay SE self employment tax on it in addition to your regular income tax. It's all included on your personal 1040 form.
(And if you paid yourself and deducted it as an expense then you would have to include it as income on the same tax return so it would be a wash.)