Whether you're filing self-employed income tax for the first time or need a refresher, we're here to help. This is what you need to know to be ready and feel confident at tax time.
Filing self-employed income tax for the first time
If you're self-employed, you likely need to pay federal self-employment taxes. These payments cover your income, Social Security, and Medicare taxes for your self-employed work.
Most businesses pay income taxes each quarter based on an estimate of what they'll owe at the end of the year. Find out more about quarterly tax payments and get other self-employed tax info at the IRS self-employed tax center.
Stay on top of deductions throughout the year
Step 1: Connect your bank to bring in your transactions
You can lower your tax liability by collecting deductions as they happen during the year. The fastest way to get your transactions in QuickBooks Online so you can categorize them is to connect your bank.
Step 2: Categorize expenses as they happen
To make tax time less stressful, categorize your transactions as they come in. The more often you sort your expenses, the easier it is to find deductions and save money at tax time. QuickBooks Online lays out all the common business tax deductions for you. As you categorize transactions, you'll add to your deductions on the Income tax page. QuickBooks Solopreneur automatically categorizes your transactions, making life easier during tax season. However, you can recategorize any transactions as needed.In QuickBooks Solopreneur
Step 3: Save money at tax time by claiming all your deductions
To read more about common deductions, see our complete list of self-employed expenses and tax deductions. You can also browse common tax deductions by industry.
What to do at tax time
It's a good idea to start your tax return as early as possible. You can start early and add more info as your forms arrive. Check out our complete guide to taxes for the self-employed and how to file small business tax returns.
Step 4: Electronically file your taxes
QuickBooks Solopreneur allows you to seamlessly file your taxes through QuickBooks, powered by TurboTax. You’ll pay when you file. When you’re ready, here’s how:
Note: At any point in this process, you can select the Live help button at the bottom of the screen to get live assistance.
- Sign in to your QuickBooks Online account.
- Go to Taxes, then the Year-end filing tab.
- Select Start Taxes. This button may instead read Continue if you’ve begun filing and left the session.
- You’ll be asked how your business is set up for taxes. Select Sole proprietor to use the Schedule C form for self-employed filers.
- Enter personal information such as your name, date of birth, and zip code. Then, select Continue.
- Next, you’re asked for information related to Federal tax returns. Select Add my income to continue.
- You’re asked if you have any self-employment income or expenses. Select Yes or No.
- Enter any additional common and/or less common income for your industry. When ready, select Continue.
- You’re asked a few more questions about expenses, and have the opportunity to type in expenses. When ready, select Continue.
- You have a chance to review Federal tax return filing. Select Check my info.
- Next, you’ll file state taxes. Select Let’s get started.
- We’ll fill in most of your return automatically and check for tax breaks unique to your state. You’re given a chance to review the details. Select Check my return.
- Lastly, you’re asked to complete three more steps to complete your filing: Select Start to review your order, your tax payment info, then file your returns.