Skip to main content
March 22, 2023
Question

I have two jobs. This year I did not qualify as a consultant but when I submitted my taxes it filed as Self-employed. Would that make a difference on the results?

  • March 22, 2023
  • 2 replies
  • 0 views
No text available

2 replies

March 22, 2023

Using the Self-Employed software is not the same as filing as "self-employed."   You can use the Self-Employed software program for any kind of income you received, including W-2 income, Social Security, etc.  If you used online Self-Employed, though, you paid the higher fee for using that software.  If you had asked before filing we could have helped you downgrade to a less expensive version of the software.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
March 22, 2023

Not sure what you mean by having two jobs, not qualifying as a consultant, and filing as self-employed.  The two jobs that you had, did you receive a W-2 for these jobs?  A W-2 is a Wage & Tax Statement and employees receive these from their employers.  Because it appears you filed as self-employed, we assume you may have received a Form 1099-NEC or a Form 1099-Misc, and when you entered this information into TurboTax, the application identified these entries as income from self-employment, and thus you completed, among other things, a Schedule C, Profit or Loss From Business.

 

If our assumptions are not correct, please follow-up with additional information explaining your tax situation.  With regard to your question about whether there is a difference filing as self-employed versus another method, there is a difference.   A self-employed person pays income tax on their reported income and also self-employment taxes (which get reported on Schedule SE).  Self-employment tax is a combined 15.3% on the net profits from a business.  While a self-employed person pays a combined 15.3% self-employment tax, there is some relief afforded the self-employed person because one-half of the self-employment tax is deducted from the taxpayer's gross income.  The one-half deduction does not necessarily reduce the tax per se, but it does reduce the total amount of income subject to tax. Thus, there is some benefit to be had.  

 

In contrast, if you were not a self-employed person, and the jobs you performed were not part of a trade or business, then the income you earned would probably be reported as Other Income.  Other Income is reported on Line 8 of Form 1040.  Additionally, while Other Income is subject to income tax, it is not subject to self-employment tax.  Thus, there is a fairly significant difference between reporting your income as self-employment income versus reporting it as Other Income. 

 

@jimmydub 

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"