What IRS Forms Do You Need to File a Self-Employed Tax Return?

by Devra Gartenstein
Save your self-employment receipts and use them to document your expenses.

You must file a tax return if you are self-employed and earn more than $400, whether you start a full-fledged business or earn income tutoring or performing odd jobs. When you are an employee, the tax return you fill out only requires you to enter earnings information from the W-2 form your employer provides. A self-employed tax return asks you to show how your self-employed venture earned and spent money. The amount you owe in taxes is based on your net earnings or the amount left over after subtracting deductible business expenses from the revenue your venture generates.

Schedule C

To report taxable income from self-employment earnings, you must document the purchases and sales from your self-employed business activity. For example, you can deduct tool purchases if they are necessary to perform odd jobs, and you can deduct purchases of reference books if you use them for your tutoring business. Schedule C is an Internal Revenue Service form for reporting self-employment revenue and expenditures that are broken down into categories. These expenses include cost of goods sold, wages paid to other people and materials that go directly into creating the product or service you provide for your customers. Schedule C expense categories also include business rentals, advertising, office supplies and communication expenses such as business-related phone and Internet.

Form 4562

IRS Form 4562 gathers information about how you use your vehicle for self-employment work and uses this information as the basis for calculating how much you can deduct on Schedule C for vehicle expenses. The form takes you through the process of calculating the percentage of business miles you drove, other than for commuting, so you can deduct the same percentage of your vehicle expenses. Alternatively, the IRS allows you to deduct a fixed amount of 56 cents for every noncommuting business-related mile you drive as of 2014.

Schedule SE

Earnings above $400 from self-employment are subject to self-employment tax or contributions to the federal Social Security and Medicare funds. Self-employed earnings are taxed at twice the typical employee rate for these payments because employers are required to contribute amounts matching self-employment earnings and, as a self-employed individual, you are both employer and employee. IRS Schedule SE takes your net earnings from Schedule C and uses it to calculate self-employment tax.

Form 1040

After you've used Schedule C and Form 4562 to calculate your net earnings from self-employment, you enter this figure on Form 1040, the general tax return that tallies all your earnings from both self-employment and conventional jobs.

Partnerships and Corporation

Most self-employed people run their businesses as sole proprietorships, which are easy to set up and are owned and operated by single individuals. If you set up your business as a partnership or a business that is legally and financially separated from its owner, you must fill out either Schedule K or a version of Form 1120 instead on Schedule C. The specific form you must use depends on the type of partnership or corporation you form.

About the Author

Devra Gartenstein has owned and run a variety of food businesses for more than 20 years. She has published two cookbooks: "The Accidental Vegan" and "Local Bounty." Gartenstein holds Master of Arts degrees in philosophy and English literature.

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