Self-Employed Person

Demystifying Self-Employment: A Comprehensive Guide

Understanding Self-Employment

Defining the Self-Employed: Self-employment encompasses a diverse range of individuals who work for themselves rather than being employed by a company or individual. Explore the intricacies of self-employment, from tax implications to business structures, and gain insights into this dynamic sector of the economy.

Navigating Self-Employment Dynamics

Insights into Self-Employment: Delve into the workings of self-employment, as defined by the Internal Revenue Service (IRS) in the United States. Understand the criteria that classify individuals as self-employed and discover the various occupations and business structures embraced by self-employed professionals.

Pros and Cons of Self-Employment

Exploring the Benefits and Challenges: Uncover the advantages and disadvantages inherent in self-employment. From the freedom to set your own schedule to the financial uncertainties, weigh the pros and cons of pursuing a self-employed career path.

Taxation for the Self-Employed

Navigating Tax Obligations: Gain clarity on tax obligations for self-employed individuals, including annual tax filing requirements and estimated quarterly taxes. Explore deductions, such as the home office deduction, and understand the nuances of self-employment tax calculations.

Self-Employment Across Borders

Global Perspectives: Examine self-employment definitions and dynamics beyond the United States. Explore classifications in the United Kingdom and the European Union, gaining insights into the international landscape of self-employment.

Facts About Self-Employment

Fact 1: Social Security tax applies to incomes up to $142,800 in 2021 and $147,000 in 2022, with a tax rate of 12.4% for self-employed individuals.
Fact 2: According to the IRS, individuals are considered self-employed if they engage in a trade or business as a sole proprietor or an independent contractor, are a member of a partnership involved in a trade or business, or otherwise are in business for themselves.
Fact 3: The self-employment tax is 15.3%, comprising 12.4% for Social Security and 2.9% for Medicare.