Self-employed individuals face unique tax challenges and opportunities. Whether you're a freelancer, independent contractor, gig worker, or small business owner, understanding your tax obligations and available deductions is essential for financial success.
Self-employment tax covers Social Security and Medicare contributions that employers typically withhold. At 15.3% of net self-employment income, this tax can be substantial. However, you can deduct half of self-employment tax when calculating adjusted gross income, reducing your overall tax burden.
Quarterly estimated tax payments are required if you expect to owe $1,000 or more in taxes. Missing these payments results in penalties and interest. Calculating estimated payments requires projecting annual income and expenses—a challenging task for those with variable income streams.
Business deductions for the self-employed can significantly reduce taxable income. Home office expenses, vehicle costs, equipment purchases, professional development, health insurance premiums, and retirement contributions are just some available deductions. Proper record-keeping throughout the year is essential to substantiate these deductions. Jacob Tax Solutions specializes in helping self-employed clients navigate tax complexity, maximize deductions, and maintain compliance.
Need Help With Your Taxes?
The team at Jacob Tax Solutions is here to help. Whether you need assistance with tax filing, IRS issues, or tax planning, we're ready to support you with 22+ years of experience.
Get a Free Consultation