Tax Glossary

Clear definitions for self-employment tax terms. Understand Schedule C, deductions, and more.

A

Your total income minus specific deductions like retirement contributions and self-employment tax.

Spreading the cost of business assets over their useful life instead of deducting all at once.

Quarterly tax payments made by self-employed individuals to cover income and SE tax.

A unique 9-digit number assigned by the IRS to identify your business for tax purposes.

The form clients use to report payments of $600+ to independent contractors.

A deduction for the business use of your home, calculated using simplified or actual expense methods.

By default, single-member LLCs are taxed like sole proprietorships, but can elect S-Corp treatment.

A deduction for business use of your vehicle, using either IRS standard rate or actual expenses.

A deduction allowing eligible self-employed to deduct up to 20% of qualified business income.

Estimated tax payments made four times per year to cover self-employment income taxes.

The 15.3% tax that self-employed individuals pay to cover Social Security and Medicare.

The IRS form where sole proprietors report business income and expenses.

An IRS provision allowing immediate expensing of qualifying business equipment purchases.

The simplest business structure where you and the business are legally the same entity.

A fixed dollar amount that reduces your taxable income, used instead of itemizing deductions.