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IRS.gov Website

Frequently Asked Tax Questions

Small Business, Self-Employed, Other Business - Schedule C & Schedule SE

  1. If you have run a small business in the past, but this year there is no income or expenses, is it necessary to file a Schedule C?
  2. I am self-employed. How do I report my income and how do I pay Medicare and Social Security taxes?

Rev. date: 08/04/2012

If you have run a small business in the past, but this year there is no income or expenses, is it necessary to file a Schedule C?

If your sole proprietorship business is inactive during the full year, it is not necessary to file a Schedule C (Form 1040) (PDF), Profit or Loss from Business, for that year.

Rev. date: 11/09/2012

I am self-employed. How do I report my income and how do I pay Medicare and Social Security taxes?

You are a sole proprietor if you are the sole owner of a business that is not a corporation:
If the total of your net earnings from self-employment from all businesses is $400 or more use Form 1040, Schedule SE (PDF), Self-Employment Tax to figure your net earnings from self-employment.  Self-Employment tax consists of the Old-Age, Survivors, and Disability Insurance (social security) and the Hospital Insurance (Medicare) taxes. The Social Security Administration uses Schedule SE to figure your benefits under the social security system. See Publication 334, Tax Guide for Small Business.
Note: The Federal tax system is based on a pay-as-you-go plan. Tax is generally withheld from employees' wages or salary before they get it. However, tax is generally not withheld from self-employment income. Thus, you may be required to make estimated tax payments. Publication 505, Tax Withholding and Estimated Tax, provides information on making estimated tax payments.