Self-Employed Self-Employed Tax Tips & Summer Jobs Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Ginita Wall Published Jun 6, 2024 3 min read Reviewed by Jotika Teli, CPA Lena Hanna, CPA Summer is the time of year when some people dive into entrepreneurship. Whether it’s a summer job, a part-time gig, a side-hustle or a small business, your new found business venture may result in your being classified as self-employed. If that’s you or someone you know, here are a few tips to help navigate your tax situation. Table of Contents Know If You're Self-EmployedWithholding and Estimated TaxesAll Income Must Be ReportedBarter IncomeFiling A Tax Return Know If You’re Self-Employed If your income is from a business or service, it is considered self-employment income. For example, working as an independent contractor in sales, being a social media sensation, babysitting, housecleaning, gardening, and even being a freelance promoter will be considered to be self-employment income. Your self-employment income is reported on Schedule C, Profit or Loss from Business. However, you will be able to reduce the income you make by deducting the related business expenses, such as supplies, auto mileage, and cost of goods sold. Withholding and Estimated Taxes If you’re an employee, your employer withholds tax from your paychecks. As an employee, you will complete Form W-4 to submit to your employer. This form is used to determine how much should be withheld from your paycheck. If you are self-employed, you may have to pay estimated taxes directly to the IRS on set dates during the year. You are expected to pay estimated taxes if you expect to owe $1,000 or more annually. All Income Must Be Reported Although you can earn a certain amount of income each year without having to pay taxes or file a tax return, if you are required to file a tax return, all income you receive from any source should be reported on your return. That includes income from side jobs, self-employment, barter exchanges, and any sort of fellowship for which you perform services. If the net income after subtracting expenses is $400 or more, you are required to file a tax return and pay self-employment taxes, which will be included as a part of your personal income tax return on Form 1040. Barter Income Sometimes you aren’t paid in cash and instead, you receive services or goods in exchange for your self-employment work. That’s called bartering, and you must report the fair market value of the goods and services you receive. For example, if you spend the summer tutoring your neighbors’ children and you receive a credit for the restaurant they own or a bicycle from the bicycle shop they own, then the value of what you received is considered self-employment income to you. Filing A Tax Return If you can be claimed as a dependent on someone’s tax return, you’ll still need to file a tax return if your income exceeds the minimum gross income filing requirements or if your self-employment income is $400 or more. Even if you aren’t required to file a tax return, you’ll still want to file if income taxes have been withheld from any income you had since you may get that money back. Filing could also generate a tax refund if you’re eligible for any of the refundable tax credits like the American Opportunity Tax Credit or the Earned Income Tax Credit. Don’t worry about knowing these tax rules. You can easily track your business income, expenses, mileage, and figure out your estimated taxes year-round with QuickBooks Self-Employed. At tax time, your information can easily be exported from QuickBooks Self-Employed to your TurboTax Premium tax return making tax filing effortless. TurboTax helps uncover industry-specific tax deductions saving you money on your taxes. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed. Get started Previous Post How To Do Your Taxes for the First Time: A… Next Post How to File Taxes in Multiple States After Moving Written by Ginita Wall More from Ginita Wall 6 responses to “Self-Employed Tax Tips & Summer Jobs” This introduction should have mentioned the low income tax credit as a clear reason to file even if no income tax must be paid. Reply I work for 2 gig employment companies. Ridesharing and food delivery that are 1099 companies in addition 5 different on-call security companies which all are W-2 employers. Auto miles, maintenance, wear & tear is heavily used and needed for all to be employed as well as cell phone necessities. How does one destinctly separate and yet use and or combine my multiple expense usage for tax purposes. Need help ASAP. Reply I filed with yall last year and was spouse to get a refound around 2,200-2,400$ never got nothing but a letter on back taxes.what happend to the 2,000&something did it go thawerd the back taxe our what? I filed this year and havnt heard nothing with a taxe repersenteative .i got a son that hast got nothing but i-o,! I only make 1,200 to 1,800 those years. I started my on buisness this year, and this ant straighted out yet. I need dessprent help with all this if the other lady didnt do nothing. Thank You, Jonathan Gokden Reply Can past year taxes be filed on turbo tax? Reply I am a sharedriver for Lyft and I did not file last year How can I proceed ? Reply Ethel, you can Amend your taxes for the income you did not file. Reply Leave a ReplyCancel reply Browse Related Articles Self-Employed I Only Received One Paycheck from My Summer Side-Gig. A… Self-Employed I Completed 30 Rideshares This Year. Am I Considered Se… Self-Employed How Much are Medicare Deductions for the Self-Employed? Self-Employed How to Determine My Federal Income Tax Rate If I’… Self-Employed Self Employment Taxes – How Much are They and What Do… Self-Employed Do I Need to File a 1040 If I’m Self-Employed? Tax Tips How to Avoid Self-Employment Tax & Ways to Reduce … Self-Employed How Holiday Bonuses are Taxed for Contract Workers Self-Employed Moving from Employee to Self-Employed? Here’s What it… Self-Employed Hobby Meets Hustle: How To File Self-Employment Taxes
This introduction should have mentioned the low income tax credit as a clear reason to file even if no income tax must be paid. Reply
I work for 2 gig employment companies. Ridesharing and food delivery that are 1099 companies in addition 5 different on-call security companies which all are W-2 employers. Auto miles, maintenance, wear & tear is heavily used and needed for all to be employed as well as cell phone necessities. How does one destinctly separate and yet use and or combine my multiple expense usage for tax purposes. Need help ASAP. Reply
I filed with yall last year and was spouse to get a refound around 2,200-2,400$ never got nothing but a letter on back taxes.what happend to the 2,000&something did it go thawerd the back taxe our what? I filed this year and havnt heard nothing with a taxe repersenteative .i got a son that hast got nothing but i-o,! I only make 1,200 to 1,800 those years. I started my on buisness this year, and this ant straighted out yet. I need dessprent help with all this if the other lady didnt do nothing. Thank You, Jonathan Gokden Reply