Report your income and expenses from your sole proprietorship on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship) or on Form 1040, Schedule C-EZ (PDF), Net Profit from Business.

If the total of your net earnings from self-employment from all businesses is $400 or more, you must pay into the Social Security and Medicare systems by filing Form 1040, Schedule SE (PDF), Self-Employment Tax.

Self-Employment tax consists of the Old-Age, Survivors, and Disability Insurance (social security) and the Hospital Insurance (Medicare) taxes.

You do not necessarily have to "have a business," but simply perform services as a non-employee to have your compensation treated this way.

The payer has determined that an employer-employee relationship does not exist in your case.

That determination is complex, but is essentially made by examining the right to control how, when, and where you perform those services.

It is not based on how you are paid, how often you are paid, nor whether you work part-time or full-time.

Behavioral control,

Financial control, and

Relationship of the parties

You also need to complete Form 1040, Schedule SE (PDF), Self-Employment Tax, and pay self-employment tax on your net earnings from self-employment, if you had net earnings from self-employment of $400 or more.

This is the manner by which self-employed persons pay into the Social Security and Medicare trust funds. Employees pay into the Social Security and Medicare trust funds, as well as income tax withholding, through deductions from their paychecks.

Generally, there is no tax withholding on self-employment income.

You may be subject to the requirement to make quarterly estimated tax payments.

If you did not make estimated tax payments, you may be charged a penalty for underpayment of estimated tax penalty.

Persons engaged in the trade or business of delivering or distributing newspapers or shopping news (including any services directly related to such delivery or distribution) are considered by statute as nonemployees and are treated as self-employed for all Federal tax purposes, including income and employment taxes.

His employer should complete the other income box on Form 1099-MISC (PDF), Miscellaneous Income.

Self-employed persons report their income on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or you may qualify to use Form 1040, Schedule C-EZ (PDF), Net Profit from Business.

See Form 1040, Schedule SE (PDF), Self-Employment Tax, which must be filed if net earnings from self-employment are $400 or more.

You should also be aware of Form 1040, Schedule SE (PDF), Self-Employment Tax, which must be filed if net earnings from self-employment are $400 or more. This form is used to figure your social security and Medicare tax which is based on your net self-employment income.

You may need to make estimated tax payments.  If not timely paid, you may also need to file Form 2210 (PDF), Underpayment of Estimated Tax by Individuals, Estates & Trusts.

For information on how to make estimated tax payments refer to Form 1040-ES (PDF), Estimated Tax for Individuals.

You can start looking for information at How to Contact Us. You may want to go to your state's individual Web site for additional information.

To access the state you need go to our Alphabetical State Index.

As with many foundations of this nature, tax information can be found on the website for the organization.

Visit to website for the foundation for information on their programs and assistance with this issue.