Expert Tax Help for Sole-Proprietors and the Self-Employed
A Sole Proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.
Who Must Pay Self-Employment (SE) Tax?
Self-Employed Persons must pay SE tax if you had net earnings of $400 or more as a self-employed person. If you are in business (farm or nonfarm) for yourself, you are self-employed. You must also pay SE tax on your share of certain partnership income and your guaranteed payments. Self Employment tax is arrived at on Schedule SE as part of your form 1040. Self Employment Income and expenses are reported on Schedule C of the form 1040.