windyMagician
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Simple English definitions for legal terms
self-employed
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A quick definition of self-employed:
Self-employed: When someone is self-employed, it means they work for themselves instead of working for someone else. They might own their own business or work as an independent contractor. They have to pay taxes on their income and file a tax return every year. They also have to pay taxes in advance every quarter.
A more thorough explanation:
Definition: Being self-employed means that you work for yourself, rather than working for someone else. This can include being a sole proprietor or an independent contractor. The Internal Revenue Service (IRS) defines a self-employed person as someone who "carries on a trade or business as a sole proprietor or an independent contractor."
Self-employed individuals are responsible for managing their own business, including finding clients or customers, setting prices, and paying taxes. They are required to file an annual tax return and pay taxes quarterly using Form 1040 or Form 1040-SR.
Examples:
- A freelance writer who writes articles for various publications is self-employed.
- A plumber who runs their own plumbing business is self-employed.
- A graphic designer who works on a project-by-project basis for different clients is self-employed.
These examples illustrate the concept of self-employment because each person is working for themselves, rather than being employed by a company. They are responsible for finding their own clients or customers and managing their own business affairs.