Finance

5 self-employment tax forms you need to know

5-self-employment-tax-forms-you-need-to-know

What Tax Forms Do You Need for Self-Employment?

Being a self-employed freelancer is the dream of many people. However, the dream might turn into a nightmare if you don't have sufficient knowledge about how to pay or deduct your taxes. Especially, understanding which tax forms you should fill according to your situation can give you headaches. Take a deep breath and relax! We will simplify the freelance tax forms you need to fill for you. 

Self-employment tax forms are essential not just at tax time but throughout the year for federal income tax purposes. These forms are also known as self-employment tax forms or independent contractor tax forms. 

If you want to look at the forms quickly, check out the self-employment tax forms chart below. 


Form Name

Who should file it?

Schedule SE (Form 1040 or 1040-SR)

Self-employed professionals who earn more than $400

Schedule C

Self-employed professionals who want to report their revenue and profit. Should be filed with Form 1040 during tax time

Form 1040-ES

Self-employed professionals who do not want tax deducted from their pay

Form 8829

Self-employed professionals who claimed their houses as their offices 

Form 1099-MISC

Self-employed professionals should receive this form from their clients if they’ve received $600 or more

Form W-9

An employer who requests the self-employed professional's Taxpayer Identification Number and Certification

 

What tax form do I use for self-employment?

Self-employment documentation is one of the most complex tasks you have to deal with as a freelancer or a self-employed professional because tax forms you need to fill might change due to your work setup. You have to file different documents in different cases. For example, if you have a home office, you have to file a specific form, or when you don't want to deduct your taxes, you have to file another form. So let’s learn more about forms needed for self-employment tax. 

1. Schedule SE (Form 1040 or 1040-SR)

One of the forms needed for self-employment tax is Form-1040. If you are a beginner as a taxpayer, you should know that Form 1040 is the first form you need to fill. To simply put it, self-employment tax is calculated on Schedule SE. 

You should use Form 1040 to calculate the tax due on net incomes from self-employment. Schedule C's net income information is used to determine the amount of self-employment tax you owe (for Social Security and Medicare taxes) The Social Security Administration takes the information from Schedule SE and understands your gains under the social security program. Consider that this tax applies, no matter what. Your age or your Medicare and social security benefits don't change the result. 

Who should file Schedule SE?

  • The amount of earnings is more than $400 

  • Every self-employed U.S citizen, even if you are a resident alien living in foreign countries. 

Learn more about dual taxation on the IRS page.

Download Schedule SE (Form 1040)

Schedule SE (Form 1040)

Instructions for Schedule SE (Form 1040)

Form 1040-SR  is available as an optional alternative to Form 1040 for taxpayers who are age 65 or older. 

2. Schedule C

If you want to report your income and expenses from your sole proprietorship, you should fill the form Schedule C.  

How much tax you have to pay as a self-employed is calculated based on your net business income. That's why you should be sure that you are taking all the self-employment deductions you are allowed on your Schedule C. This will help you reduce your net business income. 

Who should file Schedule SE?

  • You are doing a business with a primary aim for income or profit. You are doing your work with continuity and regularity.

Download Schedule C Form

Schedule C (Form 1040 or 1040-SR) 

Instructions for Schedule C (Form 1040 or 1040-SR)

3. Form 1040-ES

Form 1040 reports the estimated tax for individuals. Estimated tax is the classification applied to pay tax on income that isn’t subject to withholding, like, for example, self-employment.

The IRS grants Form 1040-ES for you to estimate your taxes for the current year. The difference between 1040, 1040 ES is that 1040 calculates the previous year, while the estimated tax form determines taxes for the current year. 

Who should file 1040-ES?

  • Freelancers or independent contractors who do not want tax deducted from their pay can file 1040-ES. 

Download Form 1040 ES 

Form 1040-ES 

Instructions for 1040 ES

4. Form 8829

Here is another self-employment tax form you should know if you are working home-office. Use Form 8829 to calculate the allowable costs for business use of your home on Schedule C and any remains to the following year of amounts not deductible this year. One of the many advantages of working at home is that you can deduct expenses from your taxes. IRS Form 8829 assists you in determining what you can and cannot claim.

Who should file Form 8829?

  • If you claimed your house as your office as a self-employed professional, you should file Form 8829. However, just because you manage your work at home doesn't imply you can write off all your house bills. 

-The deduction is limited to the percentage of your home that is assigned exclusively to your profession. For example, suppose only 10% of your house's square footage is solely reserved for business use. In that case, you can only use 10% of your home expenses as a business deduction.

-You can deduct the expenses like insurance, rent, utilities, repairs and maintenance, home depreciation, deductible mortgage interest. 

Download Form 8829

Form 8829

Instructions for Form 8829

5. Form 1099-MISC

There are many variations of self-employment tax form 1099. However, if you are a self-employed professional, 1099-MISC is the form you should know about first. 1099 Forms are the record of income, which means people from different professional status can file a 1099 form for various reasons. However, if you are a self-employed individual, you should know the form 1099-MISC. The document reflects the types of income the freelancer or independent contractor received. Please remember that the companies or people should send you Form 1099-MISC after the end of the year. 

You should know that your Social Security number or taxpayer-identification will be on the 1099 form. Therefore IRS will understand you’ve received money — and it will realize if you don’t state your income on your tax return.

Who should file Form 1099-MISC?

  • Your clients must file Form 1099-MISC to you if they paid you $600 or more for your creative work, such as your design, content, consultancy.

Download Form 1099-MISC

Form 1099-MISC 

Instructions for  Forms 1099-MISC and 1099-NEC 

Bonus: Form W-9

This one should be filled by the employers who request your Taxpayer Identification Number and Certification with the Form W-9.

Who should file Form W-9?

You should file the Form W-9 to give the correct Taxpayer Identification Number to the employer who wants to file your information.

Download Form W-9

Form W-9

Instructions for the Requester of Form W-9 

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İpek Tüzün

İpek Tüzün is a human being, digital marketing person, writer, researcher on the future of work, and sci-fi fan based on earth. Read more...

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