ACC 456 Short Answer Questions

Short Answer Questions

What constitutes self-employment income? What are the requirements for estimated tax payments by self-employed individuals? Individuals who work for themselves and make money to do so constitute as self-employment income. Independent contractors and sole proprietors are considered self-employed. They receive all payment without withholding any Social Security tax, Medicare tax, state tax, and etc. They do however have self-employment tax, which is taken out when the individual file Schedule C or C-EZ on their tax return. They would also need to file a Schedule SE. As of 2011, self-employment tax is 13.3% of the individual's net earnings. Of that self-employment tax, 10.4% of it is for Social Security and 2.9% of...