Adding self-employment income

What Counts as Self-Employment?

If you earn money outside of a traditional employer-employee relationship, you're likely self-employed for tax purposes. This includes:

• Freelancing or consulting
• Gig work (rideshare, delivery, task-based platforms)
• Selling products or services on your own
• Contract work (you received a 1099-NEC instead of a W-2)

Creating a Schedule C Business

In FileJoy, self-employment income is tracked through a Schedule C—one for each business or activity.

Step 1: Navigate to Income

Click Income in the left sidebar, then select Self-employment.

Step 2: Add a Business

Click Add Business and fill in:

• **Business name** (your name is fine if you're a sole proprietor)
• **Business type** (e.g., consulting, rideshare, freelance writing)
• **EIN or SSN** used for the business
• **Business address** (can be your home address)

Step 3: Add Business Income

Enter your total income for the year. If you received one or more 1099-NEC forms, enter each one. You should also include any income you earned that wasn't reported on a 1099 (yes, it's still taxable!).

Understanding 1099-NEC

A 1099-NEC is sent by any client or platform that paid you $600 or more during the year. But even if you earned less than $600 from a client and didn't get a form, you still need to report that income.

Tracking Expenses by Category

This is where self-employment gets fun (well, as fun as taxes get). You can deduct legitimate business expenses, which directly reduces your taxable income:

• **Supplies and materials**
• **Software and subscriptions**
• **Vehicle expenses** (mileage or actual costs)
• **Advertising and marketing**
• **Professional services** (legal, accounting)
• **Travel and meals** (50% for meals)
• **Insurance premiums**

In FileJoy, click Add Expense under your business and categorize each one.

Home Office Deduction

If you use part of your home regularly and exclusively for business, you may qualify for the home office deduction. FileJoy has a built-in calculator—see our dedicated article on claiming the home office deduction.

Self-Employment Tax

Here's the part nobody loves: self-employed individuals pay both the employer and employee portions of Social Security and Medicare taxes—that's 15.3% on net earnings. The good news? Half of that amount is deductible on your return, and FileJoy calculates this for you automatically.

Tips

• Keep receipts for all business expenses throughout the year
• Separate business and personal bank accounts for cleaner records
• Don't forget to report **all** income, even if you didn't receive a 1099
• Consider making quarterly estimated tax payments to avoid penalties