What Is the Self Employment Tax? If you work on your own, you’re probably categorized as, “self-employed.” This applies to a myriad of people including contractors, entrepreneurs, consultants, Uber drivers, real estate agents, and small business owners.
Here’s a 1-minute video from TurboTax that explains self-employment tax well:
What Is Self Employment Tax?
Ok, got it? If not, here’s a recap:
If you are self-employed, taxes are not deducted from your paycheck. Instead, you make estimated payments quarterly during the year for your income taxes and self employment taxes. If you didn’t make estimated tax payments, (yikes!) you’ll pay these taxes all at once when you file your return.
TIP: Income tax and Self-Employment Tax are Different