Here are important things to remember:
1. Self-employed taxpayers generally need to make quarterly estimated tax payments.
2. Self-employed taxpayers must file a Schedule C, Profit or Loss from Business, or Schedule C-EZ, with their Form 1040.
3. For those making a profit, self-employment and income taxes need to be paid. Self-employment tax includes Social Security and Medicare taxes.
4. Taxpayers can deduct expenses paid to run a business that are both ordinary and necessary.
5. Taxpayers can deduct expenses in the year paid or incurred. Some costs must be ‘capitalized.’