Category Archives: Self Employment

Tax Tips for Direct Sellers

The IRS has released a fact sheet that provides guidance to direct sellers on reporting income, properly claiming deductions, and inventory recordkeeping. As you probably know, a direct seller’s compensation is related to sales rather than to the number of hours worked. Services are performed under a written contract between the direct seller and the… Read More »

Methods to Calculate Self-Employment Tax

There are several steps that can used to calculate self-employment tax. It is important to calculate self-employment tax correctly because taxpayers must pay self-employment tax, in addition to income tax on their federal returns if certain situations are met.   Rules for Calculating Self-Employment Tax The rules for calculating the amount of self-employment tax due… Read More »

Paying the IRS Individual Estimated Tax

Some individuals have to pay estimated taxes or face a penalty in the form of interest on the amount underpaid. Self-employed persons, retirees and nonworking individuals most often must pay estimated tax to avoid the penalty. But an employee may need to pay them if the amount of tax withheld from wages is not sufficient… Read More »

Defined Benefit Plans and the IRS

A defined benefit plan provides for a fixed, pre-established benefit for employees at retirement. Those plans provide for a very predictable benefit. In a profit-sharing plan, the amount you end up with at retirement is a combination of contributions, earnings and probably a little bit of luck. Defined Benefit Plans and the IRS You’re hoping… Read More »

2015 Payroll Taxes and Being Self-Employed

The differences between being an employee and being an independent contractor, otherwise known as being self-employed. This is a summary of info on irs.gov and should not be taken as personal tax advice. It is important to pay proper taxes when having self-employment income   Introduction to 2015 (2016) Payroll Taxes and Self-Employment All wage… Read More »

IRS Form 1099 MISC Reporting Self-Employment Income

If you receive a 1099 MISC for services that you provide to a client as an independent contractor and annual payments that you receive total $ 400 or more, you need to present your taxes in a slightly different way than a taxpayer receiving a regular income as an employee reported in a W2 form.… Read More »

Self-Employed Paying 0.9% Additional Medicare tax

Beginning in 2013, a 0.9% additional Medicare tax is imposed on higher-income earning individuals. This additional medicare tax also has an effect on people who earn self-employment income. On Nov. 26, 2013, the IRS issued final regulations (TD 9645) implementing the Additional Medicare Tax as added by the Affordable Care Act (ACA). In all future tax… Read More »