For starters, you'll probably receive some different tax forms in the mail.
Form 1099-MISC or 1099-NEC reports money you earned doing work for a client or for a company as a non-employee. Think of it as the self-employed equivalent of Form W-2. If someone paid you $600 or more for non-employee work, they're required to send you a 1099-NEC.
Form 1099-K tracks income you receive, usually through credit cards or processors like PayPal, Venmo, Square, Etsy, Uber, or Ebay, for selling goods or providing services.
You should receive a 1099-K if you made over $20,000 from more than 200 transactions.
You're required to report all self-employed income – including cash, check, and electronic payments – even if you didn't get a 1099.
As a self-employed taxpayer, you'll also see some new forms on your tax return. We'll automatically fill these out for you in TurboTax.
- Schedule C: This calculates your net profit or loss, which carries over to Schedule 1, line 3.
- Schedule SE: This calculates your self-employment tax, which shows up on Schedule 2, line 4. You get to deduct half of it; that amount transfers over to Schedule 1, line 15.
- 1040-ES: We'll generate four of these estimated payment vouchers, one for each quarter, if (like many newly self-employed people) you didn't withhold or pay enough taxes throughout the year. These vouchers are for next year's return, in case you need them.
