10 Tax Questions Self-Employed Clients Might Ask

According to the Pew Research Center, approximately 16 million people in the U.S. are self-employed. This wage-earning method has become a desirable employment option for those wanting to be their own boss and have a more flexible work schedule, or those looking to earn a little extra cash through a “side hustle.” But tax implications for the self-employed can be complex.

Those who work for themselves must pay a self-employment tax consisting of Social Security and Medicare taxes, and the amount of which must be calculated by the taxpayer themselves or their advisor. There are also implications related to deductions, retirement plans, and more.

Are you advising your clients correctly when it comes to self-employment and contractor work? In the gallery above are 10 important tax and financial planning questions and answers advisors should be aware of regarding such employment status, according to ALM’s Tax Facts Online.

(Graphics: Chris Nicholls/ALM)

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