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How Does the IRS Define Being Self-Employed?

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Question: How Does the IRS Define Being Self-Employed?
Answer: How do you know if you are self-employed according to the IRS? The IRS defines self-employed people who are required to file self-employment Social Security taxes as:
  • A sole proprietor that conducts a trade or business;
  • An independent contractor;
  • Member of a partnership; or
  • If you are otherwise in business for yourself.

Even if you have another job where you are employed full- or part-time, if you conduct business that classifies as self-employment income you may still be subject to self-employment taxes. In other words, regardless of other sources of income, if you have income from being self-employed, you generally must pay self-employment taxes.

Filed in: Federal Tax FAQs

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