Is self employment a good thing to do?
It all depends on what your expenses are on that income. You won’t owe any income tax but you may owe self employment tax on that (social security and medicare payments that get deducted from your check when you work for some else). If you have no expenses to deduct than the self employment tax on that amount is approx. $636. You will fill out a 1040, Schedule C Profit or Loss from Business and Schedule SE Self Employment Tax. You enter the income and expenses on the Schedule C. That net profit is what the SE tax is based on. So make sure to take all the allowable deductions to lower it. You don’t say your age and whether you have other income or not so I can’t tell you if you qualify for the earned income credit which could help offset the SE tax. Edit: Filing is not a choice – you are required to file all self employment income over $400. However being over 25 and no one elses dependent can qualify you for the Earned Income Credit if your adjusted gross income was under $12880. This
