Self-Employed Tax Obligations
Tax procedure is different from a standard W-4 worker if you do have a sole proprietorship to carry on your business. EIN is must to make tax operations.
How to get EIN ?
The process to acquire EIN is so easy. There are two options to get it. The first way is online application and the second one is delivering it by hand. After printing out the documents, it is needed to be sent to the IRS. Here is the crucial point that if the papers submitted to the IRS, it means that application has been made already.
Since you are the only one and self-employed, your tax duties and responsibilities are much more than what the standard employee has. In addition to personal income taxes, Self-Employment (SE) fee must be paid. SE does include the cost of social security and Medicare.
All the ones self-employed are not responsible for paying taxes. Firstly, it is needed to calculate net profit and net loss from business. Income and expenses are the subjects of this calculation here. If the costs are less than salary, the difference is net profit. If the values are higher than income, the difference is a net loss. If there is net profit, it is subject to self-employment taxes.
On the other hand, if you do have a church organisation, you don’t have to pay at all.