This page is a starting point for small businesses and self-employed taxpayers who file Schedule C (PDF) with their Form 1040. Below are links to information on the most common issues many small business owners face, including:
Who is Self-Employed?
If you are in business for yourself, or carry on a trade or business as a sole proprietor or an independent contractor, you generally would consider yourself self-employed.
If You Are A New Business
Starting a Business
If you are just starting your business please see our Starting a Business page for important information such as a checklist for starting a business, selecting a business structure, recordkeeping requirements, and selecting an accounting method.
Operating a Business
Learn about the various responsibilities associated with operating your own business
Independent Contractor (Self-Employed) or Employee?
Is someone who is doing work for your business an independent contractor or an employee?
As a business owner, before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. Make sure you know the difference. If you incorrectly classify an employee as an independent contractor, you can be held responsible for employment taxes that should have been withheld from their wages.
Are you self-employed or are you really an employee? This can also apply to you and your relationship with another business owner. Need more information?
Self-Employment Tax
If you are self-employed you must pay Self-Employment Tax
Self-employment 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.
If you are self-employed you must pay Estimated Taxes
This applies even if you also have a full-time or part-time job and your employer withholds taxes from your wages. Estimated tax is the method used to pay tax on income that is not subject to withholding. If you don’t make quarterly payments you can be penalized for underpayment at the end of the tax year.
Business and Employment Taxes
If you own a business you must pay Business Taxes
Your form of business determines which income tax return form you have to file. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute.
As an employer you must withhold Employment Taxes from your employees' pay
If you have employees, you are responsible for federal, state and local taxes. As an employer, you must withhold certain taxes from your employees' wages.
Filing and Paying Your Taxes Electronically
e-file for Business and Self-Employed Taxpayers
EFTPS: The Electronic Federal Tax Payment System
EFTPS is a tax payment system provided free by the U.S. Department of Treasury. Pay federal taxes electronically via the Internet or phone 24/7.
Considering a Tax Professional
Tips for Choosing a Tax Preparer
Essential Forms and Publications
Schedule C (PDF) and Instructions (PDF)
Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor.
Schedule C - EZ (PDF)
Small businesses and statutory employees with expenses of $5,000 or less may be able to file Schedule C-EZ instead of Schedule C.
Publication 334 (2007), Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ)
Publications and Forms for the Self-Employed
A collection of forms and publications related to understanding and fulfilling your filing requirements.
IRS Educational Materials and Assistance
Small Business Tax Workshops are designed to help the small business owner understand and fulfill their Federal Tax responsibilities. Workshops are sponsored and presented by IRS partners who are Federal Tax specialists.
The Small Business Videos page contains an online workshop for new business owners who don’t have time to attend in person. The workshop is also available on a DVD. Additional short videos on a variety of topics are dedicated to helping your small business.
Small Business Products Online Ordering
Our free products, developed especially for the Small Business/Self-Employed person will help you meet your tax requirements.
Taxpayer Advocate Service
The Taxpayer Advocate, an independent organization within the IRS, helps taxpayers resolve problems with the IRS.
References/Related Topics
Business.gov – Self-Employed
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