Self-Employed

Contract for Services
A contract undertaken by a self-employed individual, distinguishing it from a contract of employment. Understanding the distinction is crucial for tax purposes.
Declaration of Estimated Tax
A requirement for taxpayers who do not have adequate tax withheld regularly, often applicable to self-employed individuals. It ensures that taxpayers can manage their tax liability by paying estimated taxes quarterly.
Insurance Premiums
Insurance premiums are the amounts paid to an insurance company to cover potential hazards. These payments can have tax implications and differ in deductibility based on whether they are made by businesses or individuals.
IR35
A rule introduced in the Finance Act 2000 that requires individuals providing services through intermediaries to be taxed as employees rather than self-employed, affecting tax deductions, National Insurance contributions, and expense deductions.
Proprietorship Income
In tax law, proprietorship income refers to the income earned within businesses that are sole proprietorships (owned by one person and not incorporated).
Schedule C
Schedule C is a tax form used by individuals to report income and expenses from a business or self-employed activity.
Self-Employed
Self-employed individuals work for themselves, without a formal employer, and include sole proprietors and partners in partnerships. They shoulder all business risks and responsibilities, paying self-employment tax in addition to income tax on their net income.
Self-Employed Taxpayers
Individuals who independently operate their trades or businesses and are taxed based on their profits rather than through PAYE, with unique National Insurance contributions compared to employees.
Self-Employment Income
Self-employment income refers to the earnings generated by individuals who work for themselves rather than being employed by a company or organization. This income is subject to Social Security taxes if the net profit from the trade or business is at least $400 for the year. In some cases, earnings less than $400 might still be considered for Social Security purposes.
Self-Employment Retirement Plan
A Self-Employment Retirement Plan, also referred to as a Keogh Plan, is a tax-deferred pension account specifically designed for self-employed individuals and unincorporated businesses. It enables them to set aside a portion of their income for retirement.
Self-Employment Tax
Provision for Social Security (old-age, survivor's, and disability insurance) and Medicare (hospital insurance) for self-employed individuals. The rate is equal to the combined rates paid for Social Security by both employer and employee.
SEP-IRA (Simplified Employee Pension Plan)
A SEP-IRA (Simplified Employee Pension) is a retirement savings plan designed for self-employed individuals and small business owners, allowing them to make contributions toward their own and their employees' retirement savings.
Simplified Employee Pension Plan (SEP-IRA)
A SEP-IRA is a retirement plan specifically designed for self-employed individuals and small business owners, allowing for tax-deferred growth of retirement savings.
Simplified Employee Pension Plan (SEP)
A Simplified Employee Pension (SEP) Plan is a retirement plan specifically designed for small businesses and self-employed individuals, allowing them to contribute toward retirement savings for themselves and their employees.

Accounting Terms Lexicon

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