As a self-employed individual, generally you are required to file an annual income tax return and pay estimated taxes quarterly. 

Self-employed individuals generally must pay Self-Employment (SE) tax as well as income tax.

SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. In general, the wording "self-employment tax" only refers to Social Security and Medicare taxes.

Before you can determine if you are subject to self-employment tax and income tax, you must figure any net profit or net loss from your business.  

You do this by subtracting your business expenses from your business income.

 If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040 or 1040-SR .

 If your expenses are more than your income, the difference is a net loss. You usually can deduct your loss from gross income on page 1 of Form 1040 or 1040-SR. 

But in some situations your loss is limited. See Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C), for more information.  

You have to file an income tax return if your net earnings from self-employment were $400 or more. 

If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 and 1040-SR (Instructions ) .

It's important that the taxpayer is correctly classified while they provide gig economy services. Gig workers may be classified as independent contractors by digital platforms that match workers' services with customer needs.

This means the business, or the platform, must determine whether the individual providing the services is an employee or independent contractor.

Taxpayers should review the worker classification information on IRS.gov to see how they should be classified.

Independent contractors may be able to deduct business expenses depending on tax limits and rules. It's important for taxpayers to keep records of their business expenses.

 Get ready today to file your federal income tax return. Planning ahead can help you file an 

acuurate return and avoid delays that can slow your tax refund. To make it easier make sure your have the information 

you need.

Personal information Needed to File

• Your name on record with the Social Security Administration (SSA)
• Your current address
• Social Security number or individual tax ID number (ITIN) for you and anyone else on your return
• If you were a victim of identity theft, your IP PIN
• Bank account and routing numbers to get a refund or pay by direct deposit

Most Common Types of Income

People or organizations that paid you during the year are required to report the payments to the 

IRS on an information return. You should get them electronically or by mail in January or February.

• Forms W-2 or a corrected W-2 show your wages from employers. Here's what to do if you didn't get a W-2.
• Form W-2G for lottery and gambling winnings
• Forms 1099 show other types of income. The most common are:
• Form 1099-K for payments from payment cards and online marketplaces
• Form 1099-G for government payments such as unemployment benefits
• Form 1099-INT from banks and brokers showing interest you received
• Form 1099-DIV for dividends and distributions paid to you
• Form 1099-NEC for freelance and independent contractor work in the gig economy
• Form 1099-R for retirement plan distributions or pensions or annuities
• Form SSA-1099 for Social Security benefits
• Form 1099-MISC for other miscellaneous income
• Form 1095-A, Health Insurance Marketplace Statement, lets you reconcile advance payments or claims
• Records of digital asset transactions
• Unemployment compensation
• Statements from banks, payment apps or online marketplaces
• Checks paid to you

Beware Of the Self Employment Tax Credit

The Internal Revenue Service issued a consumer alert following bad advice circulatingon social media about a non-existent “Self Employment Tax Credit ” that’s misleading taxpayers into filing false claims. There is inaccurate information suggesting people qualify for payments of up to $32,000 when they actually do not. In reality, the underlying credit being referred to as the “Self Employment Tax Credit it’s a much more limited and technical credit called Credits for Sick Leave and Family Leave.

The IRS is seeing repeated instances where taxpayers are incorrectly using Form 7202 to claim a credit based on income earned as an employee and not as a self-employed individual. The IRS urges people to check with a trusted tax professional before filing for any “Self Employment Tax Credit ” or any other questionable tax claim circulating on social media.

Work income comes from activity you do to earn income, sometimes through an app or website (digital platform), like:

• Drive a car for booked rides or deliveries
• Rent out property or part of it
• Run errands or complete tasks
• Sell goods online
• Rent equipment
• Provide creative or professional services
• Provide other temporary, on-demand or freelance work

Note: This list does not include all types of work income.

If you do work as an independent contractor, you may have to pay estimated taxes. You must file a tax return if you have net earnings from self-employment of $400 or more from gig work, even if it's a side job, part-time or temporary.

Unsure if you are an employee or independent contractor? check your worker status. 

Staying Compliant requires due dilegince be used to pay and file taxes. More often than many might think, the growing IRS tax codes can be a bit hard to understand and when filing federal income taxes many taxpayers get confused.  

Credits, deductions, exemptions, oh my! Is how many of us feel. Fortunately You can use your Individual Online Account to check if you’re eligible to file an offer in compromise (OIC), make payments, and file your OIC online. We'll review your OIC and decide if you qualify.

An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability or doing so creates a financial hardship. We consider your unique set of facts and circumstances:

• Ability to pay
• Income
• Expenses
• Asset equity

The IRS generally approves an Offer In Compromise when the amount you offer represents the most the IRS can expect to collect within a reasonable period of timer.

You are eligible to apply for an offer in compromise if You:

• Filed all required tax returns and made all required estimated payments.
• Aren't in an open bankruptcy proceeding.
• Have a valid extension for a current year return (if applying for the current year).
• Are an employer and made tax deposits for the current and past 2 quarters before you apply.

If you apply for an offer in compromise and we can’t process your offer, we'll:

• Return your application and offer application fee.
• Apply any offer payment you included to your balance due.

Submit your application

Find forms to submit an application and step-by-step instructions in Form 656-B, Offer in Compromise Booklet. Complete an application package:

• Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms.
• Form 656(s) – you must submit individual and business tax debt (Corporation/ LLC/ Partnership) on separate Forms 656. $205 application fee (non-refundable).
• Initial payment (non-refundable) for each Form 656.

Mail the above to the applicable site listed on Form 656-B. You may file your OIC online, via your Individual Online Account.