Internal Revenue Service United States Department of the Treasury
Module 14: Self-Employment Income and Self-Employment Tax

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In this tax tutorial, you will learn about self-employment income and the self-employment tax.

Self-employed individuals are independent contractors, not employees.

  • Self-employed individuals control the methods and means by which they perform services for others.

For a business owned by just one person, self-employment income, expenses, and profit or loss are reported on Form 1040, Schedule C, Profit or Loss From Business.

  • Self-employment profit increases the income that is subject to tax.
  • Self-employment loss reduces the income that is subject to tax.

The self-employment tax is

The self-employment tax increases the total tax.

An adjustment to income of one-half of a taxpayer's self-employment tax decreases the income that is subject to income tax.


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