If you are a freelance writer or a contract employee, you are self-employed. One big benefit to being in business is taking deductions for business expenses to reduce your taxes, but you will have to file a business tax return to get these deductions. These articles will help you figure out how to file your business tax return the simple way.
If you are self-employed and you have not set up any specific business entity (like a limited liability company or corporation), you are a sole proprietor. Sole proprietors pay income taxes on their personal tax returns, using Schedule C to provide information on business income and expenses.
Schedule C is one of the most common tax schedules which are part of a personal tax return (for 1040 or other) package. You will need specific information on income and deductions to complete this form.
Self-employment taxes are the taxes a business owner pays for Social Security and Medicare. The amount of tax owed is roughly 12.4% (10.4% in 2011); similar to the amounts paid by employers and employees for FICA taxes. Schedule SE is used to calculate the amount of self-employment taxes for your personal tax return.
If your business taxes are simple, you may have considered doing them yourself, with the help of tax software. This article lists the features and costs of the three major tax software programs: TaxAct, Turbo Tax, and H&R Block At Home (formerly TaxCut).
The national tax preparation services work only on personal tax returns. They don't really have much expertise in business taxes, even the simple Schedule C. To help you get the best tax advice, you will need to hire a tax adviser/tax preparer. Here are some options for finding this person.