Module: Understanding Taxes for the Self-Employed and Business Owners

Being self-employed or running your own business means taking charge of your tax responsibilities—a key part of building long-term financial success.

Here are the main points to know:

✅ Self-Employment Tax:
In addition to income tax, self-employed individuals must pay self-employment tax, which covers Social Security and Medicare.

✅ Recordkeeping:
Keep detailed records of all income and expenses to ensure accurate filings and maximize deductions.

✅ Professional Help:
A qualified accountant or tax professional can help you navigate complex tax laws and uncover savings opportunities.

✅ Common Forms:

• Schedule C (Form 1040): Report profit or loss from a business if you’re a sole proprietor.
• 1099 Forms: Used to report freelance or contract work (e.g., delivery drivers, consultants, designers).

✅ Capital Gains & Losses:
Understand how to report profits or losses from selling assets.

• Short-term vs. long-term gains impact how much tax you pay.
• Learn strategies to minimize capital gains taxes.

✅ Choosing a Business Entity:

• LLC: Offers flexibility and pass-through taxation.
• S-Corp: Limits shareholders but can reduce self-employment taxes.
  Consult with a tax advisor to choose the best setup for your situation.
• By mastering these basics, you’ll stay compliant, make smarter financial decisions, and keep more of what you earn.