When it comes to the question of self-employment, the government cares less about what you did, and more about how you got paid.
It’s All About the Paperwork
If you get a W-2 in January from a company or person that you work for then you’re considered their employee — simple as that. But if you get a bunch of little 1099s in the mail, or if you just got a personal check or payment on an app like Venmo, then you’re self-employed…and that means you’re responsible for paying taxes on that income yourself.
They Call Me Freelance...
People use this word a lot these days, even if they don’t all mean the same thing. Freelance, permalance, independent contractor, roustabout (okay, maybe it’s been a minute on that one…) — they’re often variations on the same theme. But, again, for tax purposes, it really only matters if they send you a W-2 or not.
The silver lining is that when you’re self-employed you can deduct your expenses, which ultimately benefits your bottom line. W-2 employees can rarely deduct expenses from their income.
To make sure you’ve got it right, be in touch with one of our Tax Advisors and we’ll help you sort through the details: email@example.com.