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If you made extra income on the side last year, such as by selling an amazing piece of artwork or walking your neighbor’s dog, then you are one of the more than 58 million gig workers, freelancers and other self-employed workers in the United States.
Just because you may not be an employee of a company, doesn’t mean that you are exempt from paying taxes. The IRS expects you to pay taxes on your self-employment income just as it expects traditional workers to pay taxes on the income they receive from their employers.
But the process of paying taxes on self-employment income can be a lot more complicated than paying taxes on traditional income from an employer.
Here’s what everyone who earns gig, freelance or any other type of self-employment income — whether part time or full time — needs to know about federal income taxes.
1. Your income is taxable
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Again, self-employment income of any sort generally is taxable and must be reported on your federal tax return. This is the case even if you didn’t receive any earnings statements, such as the following, from the entities through which you earned gig, freelance or other self-employment income:
- Form 1099-MISC (which is for miscellaneous income)
- Form 1099-NEC (for nonemployee compensation)
- Form 1099-K (for payment card…
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