 |
|||
 |
 |
 |
 |
 |
|||
 |
 |
||
 |
|||
external link will open a new
browser window. Close the new
window to return to the
North Country Alliance
Doing Business Guide.
Self-Employment Taxes
If you are self-employed, there is no one to withhold income tax or Social Security tax (FICA) on the profit you make. This does not mean you are exempt from taxes, however. As an independent business owner or partner, you are responsible for your own withholding. You simply do it in a different form. It is computed at the end of the year and is added to the income tax liability on your Form 1040. You usually must pay self-employment tax if you had net earnings from self-employment of $400 or more. You are self-employed for this purpose if you are a sole proprietor, an independent contractor, a member of a partnership, or are otherwise in business for yourself. You can be liable for paying self-employment tax even if you are currently receiving Social Security benefits. For additional information on self-employment taxes contact the Internal Revenue Service.