When You’re Self Employed
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Last Modified
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Aug 18, 2022
A self- employed individual wears two hats for tax purposes, they are both the Employer and the Employee and pay both the Employer and the Employee portions of the FICA and Medicare (Self – Employment) taxes to the IRS. Self employed individuals fall into three categories. The first is the Sole Proprietor or Single Member LLC owner and file their taxes on their individual 1040 return on Schedule C. The second category is the Farmer who files their taxes on their individual 1040 return on Schedule F. The third category of Self- Employed individuals are those who actively participate as a Partner or a Member in a Partnership or Multi – Member LLC. The taxes are filed on a Form 1065 with the individual’s income from Self Employment flowing to them on a Schedule K-1, appearing in Box 1 and then in Box 14 “Self- Employment Income” on the K-1. The income is reported on Page 2 of Schedule E on the individual’s 1040 tax return. The Self Employment income then flows from Schedule C, Schedule F or Schedule E over to Schedule SE, where the Self Employment Taxes due are calculated. The Self Employment taxes are then added to the individual’s income taxes to determine the total taxes due. If you have questions regarding your self-employment taxes, please contact us at Ken Ashworth and Associates.
About the author:
Ken R. Ashworth
Founding Attorney of Ken R. Ashworth & Associates
Ken R. Ashworth is the Founding Attorney of Ashworth Law in Henderson, Nevada. He focuses his practice on asset protection, business litigation, estate planning, and tax litigation. Ashworth has practiced law since 1992 and is admitted to the State Bar of Nevada. He earned his J.D. from Pepperdine University School of Law in Malibu, California, in 1990. His work includes advising clients on legal matters involving businesses, estates, asset protection, and tax disputes.
