Don't let the 15.3% self-employment tax catch you off guard. We help freelancers and contractors audit-proof their Schedule C and uncover industry-specific deductions that software ignores.
Self-employment tax is a federal tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves. Unlike W-2 employees who split this cost with their employer, self-employed individuals (including freelancers, independent contractors, and sole proprietors) are responsible for paying the full 15.3% rate on their net earnings. This tax is calculated using Schedule SE attached to Form 1040 and is required if your net earnings from self-employment were $400 or more, regardless of your age or whether you receive Social Security benefits.
The core of your return is IRS Schedule C, where we report your business income or loss. We move beyond simple data entry to analyze the "ordinary and necessary" expenses relevant to your specific industry—whether you are a graphic designer, a consultant, or a tradesperson. We carefully calculate complex write-offs like the Home Office Deduction using the method (Simplified vs. Regular) that yields the highest return while ensuring your claims are substantiated to withstand IRS scrutiny.
The IRS uses automated matching systems to compare the 1099 forms you receive against what you report. We meticulously reconcile your Forms 1099-NEC (Nonemployee Compensation) and 1099-K (Payment Card Transactions from Uber, eBay, etc.) to ensure total alignment. If your 1099-K reports gross income that includes fees, refunds, or personal transactions, we make the necessary adjustments on your return to prevent you from paying taxes on money you didn't actually keep.
For gig drivers and mobile service providers, your vehicle is likely your largest deduction. We help you determine the most beneficial deduction method by comparing the Standard Mileage Rate against Actual Expenses (gas, insurance, repairs, and depreciation). We also advise on compliant mileage log requirements, ensuring that if the IRS asks for proof of your business driving, you have the necessary records to protect your deduction.
The Hidden Cost of "Easy" Filing
Tax software often categorizes gig work as "hobby income" or fails to ask the right questions about mixed-use assets like cell phones and internet bills. Furthermore, many self-employed individuals overpay because software defaults to the "Standard Mileage" rate without checking if "Actual Expenses" (including heavy depreciation on a new car) would save thousands more. JK Tax Service treats your freelance work like the legitimate business it is, ensuring you don't pay a penny more in self-employment tax than necessary.
Get StartedYes. The IRS requires you to file a tax return if your net earnings from self-employment were $400 or more, regardless of whether a client sent you a form. Even if you did not receive a 1099-NEC or 1099-K, all income must be reported on your Schedule C. Failure to report cash or app-based payments is considered tax evasion.
A general rule of thumb is to set aside 25% to 30% of your net income (profit) for taxes. This covers the 15.3% self-employment tax as well as your federal and state income tax brackets. If you are earning significantly, you may need to make quarterly estimated tax payments to avoid underpayment penalties at year-end.
Yes, if you are self-employed and have a net profit for the year, you may be able to deduct premiums paid for medical, dental, and long-term care insurance for yourself, your spouse, and your dependents. This is taken as an "adjustment to income" on Form 1040 (above the line), rather than as an itemized deduction, which is highly beneficial.
The IRS looks at whether you engage in the activity with the primary intent of making a profit. Businesses can deduct expenses in full even if they result in a loss (within limits), whereas hobby expenses are generally not deductible, yet hobby income is still taxable. We help you demonstrate "profit motive" to protect your business status.