I am self-employed. How do I report my income and how do I pay Medicare
and social security taxes?
Your self-employment income is reported on Form 1040, Schedule C (PDF), Profit or Loss from Business, or on Form 1040, Schedule C-EZ (PDF), Net Profit from Business.
Your Medicare and social security taxes are reported on Form 1040, Schedule SE (PDF), Self-Employment Tax.
As a self-employed person, you pay your Medicare and social security taxes
the same way you pay your income taxes. If you expect to owe less than $1,000
in total taxes, you can pay them when you file your income tax return. If
you expect to owe $1,000 or more in total taxes, you will need to make estimated
tax payments. These payments are made quarterly using Form 1040-ES (PDF), Estimated Tax for Individuals. You will need to
figure these taxes at the beginning of the year. To learn about figuring and
making estimated tax payments, please refer to Publication 505, Tax
Withholding and Estimated Tax.
If you have run a small business in the past, but this year there
is no income or expenses, is it necessary to file a Schedule C?
If your sole proprietorship business is inactive during the full year,
it is not necessary to file a Form 1040, Schedule C (PDF), Profit
or Loss from Business, for that year.
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