| How do I Report Independent Contractor Income? |
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A reader asks: I did some work this year as a contractor for Google. They didn't withhold anything for taxes. How am I supposed to report this income? Answer: Technically, if you were working as an independent contractor, you were running a business as a sole proprietor. This means that you'll report the income on Schedule C: Profit or Loss from Business. Your independent contractor income will be taxed at regular income tax rates, but it will also be subject to Self-Employment tax of roughly 15% (calculated on Schedule SE). The good news, however, is that you can deduct any "ordinary and necessary" expenses related to producing this income. Want to learn more about being an independent contractor? Take a look at my related book: Surprisingly Simple: Independent Contractor, Sole Proprietor, and LLC Taxes Explained in 100 Pages or Less.
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