- 1). Record all the necessary information on Schedule C as to how much money you made. Fill in any of the lines regarding business expenses.
- 2). Figure out your net profit or loss and enter this amount on line 12 on your 1040 form and on line 2 on your SE form.
- 3). Fill out all the information on your 1046 form up to where it requires you to add information about self employment (around line 27).
- 4). Prepare form SE to include with all the paperwork to send to the IRS. Fill in all your earnings as instructed on lines 1 and 2. Add the lines together, if necessary, and write your net earnings on line 3.
- 5). Multiply that amount by .9235 (check the current year's tax form for different percentages amounts). Write that amount on line 4.
- 6). Figure your self-employment tax by the percentage indicated on line 5. (Multiply different amounts of money earned by different percentages. See the current year's tax form for the correct percentages and dollar amounts.)
- 7). Take half of your self-employment tax by either dividing by 2 or multiplying by .5. Enter this amount on line 6 of form SE.
- 8). Transfer that amount onto approximately line 27 on form 1040.
- 9). Fill in any other lines about self-employment that apply to you, such as a deduction for self-employed insurance.
- 10
Add your total self-employment tax around line 56 on form 1040, filling out any other lines that pertain to you as an individual. Add up your total taxes on form 1040. - 11
Insert any payments you may have made throughout the year in the appropriate blanks and add those numbers up as well. - 12
Find the difference between what you paid and what you needed to pay to find out if you are getting a refund or have to pay. Fill in the appropriate lines.
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