Work for yourself? You may be self-employed if any of the following apply to you:
If you’re self-employed, you are required to file an annual return if you meet the minimum income requirements state estimated taxes, pay quarterly estimated taxes, which include estimated income tax and social security and Medicare tax. The Taxpayer generally will have to also pay state estimated tax as well. You also must pay self-employment tax (SE tax), which is a Social Security and Medicare tax.
As a self-employed worker, you don’t have an employer withholding Social Security and Medicare taxes and income tax for you. This means you must submit these taxes as a quarterly payment. Use your prior year’s annual tax return to fill out Form 1040-ES, Estimated Tax for Individuals and figure out if you need to file quarterly estimated taxes to the IRS and State.
To make your estimated tax payment: Use provided vouchers on Form 1040-ES to mail in your owed amounts or file online through the Electronic Federal Tax Payment System (EFTPS). First year as self-employed? You’ll need to estimate how much you expect to earn. If you overshot your actual amount the first time, you can use Form 1040-ES to submit a new estimate moving forward.
Subtract your business expenses from your business income to find your net profit or net loss.
Working from home has its perks beyond a stress-free commute and lax dress code. You may be able to deduct home office expenses on your taxes if it’s the main, exclusive space for conducting your business (e.g. using your garage gym as a personal training space).