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Self Employment Income

Self Employment Income Definition

Different types of income can be self employment income. The source of your income and your involvement in the activity from which your income is derived will determine whether it is self employment income.

Examples of sources of self employment income subject to self employment income taxes

The following are sources of self employment income that are subject to the self employment tax:

  • Income from a part time business

  • Income you receive as a sole proprietor

  • Fees you receive for performing services as a director of a corporation

  • Payments you receive from insurance or other sources for lost business inocme if you are self employed and reduce or stop your business activities

  • Income you receive as an independent contractor

  • Any self employment income you receive from activities in a U.S. possession (resident aliens are generally subject to the same rules as US citizens and are subject to the tax; nonresident aliens are not)

  • Interest you receive if you receive it in your trade or business

  • Rent from real estate and personal property leased with real estate if you are a real estate dealer or you provide services for your tenants

  • Your fees when you administer a deceased person's estate if you are

    • a professional fiduciary,

    • a nonprofessional fiduciary and the estate includes an active trade or business that you actively participate in and your fees are related to the operation of that trade or business, or

    • a nonprofessional fiduciary of a single estate that requires extensive managerial activities on your part for a long period of time, provided these activities are enough to be considered a trade or business.

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