TurboTax FAQ
TurboTax FAQ
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How is being self-employed different from being an employee?

It's different in a couple of ways.

When You’re an Employee:

  • You get a W-2.
  • Federal, state, Social Security and Medicare taxes are withheld from your paycheck each payday.
  • You pay half of your Social Security and Medicare taxes, and your employer pays the other half.

When You’re Self-Employed:

  • You may get a 1099-MISC.
  • There's no employer to withhold taxes from your pay.
    • That means federal, state, Social Security and Medicare taxes aren’t withheld from your pay.
  • Instead, you make your own quarterly estimated tax payments.
  • You pay all your Social Security and Medicare taxes, but you qualify you for a self-employment tax deduction.
  • You can deduct expenses related to your work, things like mileage, home office expense, supplies, etc.

After you enter your 1099-MISC, we’ll review your work related expenses including the deductible part of your self-employment tax. We’ll also help you calculate your estimated tax payments for next year so you can avoid having to pay all your taxes at once.