Deductions for independent contractor

An independent contractor deducting business expenses is generally more favorable than if you are an employee. Consequently, individuals whose employment status is not clear may choose to claim independent contractor status.

Deductions and income reporting for an indepedent contractor who's a sole proprietor are done through the Schedule C Profit and Loss From Business attachment to the Form 1040 personal income tax return.

Declared independent contractors are responsible for reporting and paying their own income tax, plus what is called self-employment taxes, which is both the employer and employee portions of the Social Security and Medicare taxes, as well as unemployment taxes.