NYC Self Employed (Independent Contractor or Sole Proprietorship) Services

Below you will find information helpful in answering many questions related to being self-employed or independent contractors.

Who is Self-Employed?

If you are in business for yourself, or carry on a trade or business as a sole proprietor or an independent contractor, you generally would consider yourself a self-employed individual. You are an independent contractor if the person for whom you perform services has only the right to control or direct the result of your work, not what will be done or how it will be done.

Do I Need an Identification Number?

You must have a taxpayer identification number to operate your business. This is generally your social security number, or an individual taxpayer number. However if you have employees, and in some other circumstances, you will need an Employer Identification Number.

Filing Requirements for the Self-Employed

As a self-employed individual, you may be responsible for completing multiple tax forms, depending on your type of business.

IRS e-file for Business and the Self-Employed

Electronic filing and payment options for businesses and self-employed individuals include employment taxes, information returns, partnerships returns, and returns for estates & trusts. You can also electronically file corporate tax returns (Forms 1120/1120S) and returns for exempt organizations (Forms 990/990EZ & 1120 POL).

This chapter primarily explains business income and how to account for it on your tax return, what items are not considered income, and gives guidelines for selected occupations.

If there is a connection between any income you receive and your business, the income is business income. A connection exists if it is clear that the payment of income would not have been made if you did not have the business.

You can have business income even if you are not involved in the activity on a regular full-time basis. Income from work you do on the side, in addition to your regular job, can be business income.

You report most business income, such as income from the sale of your products or services, on Schedule C or C-EZ; but you report the income from the sale of business assets, such as land and office buildings, on different forms.