The Tax Tutor

For some, they consider themselves self-employed rather than owning a small business.  For example, a painting contractor may work just for one builder.  The builder pays the painter by the job, not by the hour and the painter pretty much works his own hours and provides his own tools.  The painter would be considered an independent contractor, or ’self-employed.’  

At the end of the year, the contractor would provide the painter with a Form 1099 showing how much he had paid the painter for the year.  The painter turns around and reports this information on his own tax return. 

Now, the painter may call himself self-employed, which is fine, but he is also a small business owner entitled to all of the deductions to which  your corner gas station is entitled.  So, you see, it’s just a matter of terminology, self-employed vs. small business.  For the IRS, they are considered one and the same.

This entry was posted on Sunday, January 17th, 2010 at 8:39 pm and is filed under Self-Employed Tax. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.