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Typically, you include Schedule C with your tax return to report the self-employed income?along with the deductions for your business expenses. And if your net earnings from self-employment exceed $400, you will have to pay self-employment tax (for Social Security and Medicare), which is figured on Schedule SE.
If you are hired by a company as an employee, you'll be asked to fill out a W-4 form. If you will be doing work for the company as a self-employed independent contractor, freelancer or consultant, you'll fill out a W-9 form.
When you do consulting work in the U.S., you can be paid two different ways: as an employee on a W-2 tax basis, or on a 1099 tax basis as an independent contractor. As a consultant, being paid on a 1099 tax basis is a huge plus for two key reasons: You save more for retirement. You pay less tax.
When you do consulting work in the U.S., you can be paid two different ways: as an employee on a W-2 tax basis, or on a 1099 tax basis as an independent contractor. As a consultant, being paid on a 1099 tax basis is a huge plus for two key reasons: You save more for retirement. You pay less tax.
Consultants who work for themselves are not employees. For tax purposes, they usually qualify as an independent contractor . This means that the client company who hires them to perform work does not have to pay for their benefits, unemployment or training.