Tax terms, explained in plain English.
No jargon, no fluff — just clear answers to the questions the self-employed actually ask.
What Is a 1099-NEC?
A 1099-NEC is a tax form that reports money a business paid you for work you did as an independent contractor rather than as an employee.
Read guideWhat Is a 1099-K?
A 1099-K is a tax form that reports the total payments you received through payment cards or third-party apps like PayPal, Venmo, or a marketplace.
Read guide1099-NEC vs 1099-MISC
The 1099-NEC reports money paid to independent contractors, while the 1099-MISC reports other kinds of payments like rent, royalties, and prizes.
Read guide1099 vs W-2
A W-2 means you are treated as an employee with taxes withheld from your paychecks, while a 1099 means you are an independent contractor responsible for paying your own taxes.
Read guideWhat Is Schedule C?
Schedule C is the tax form where sole proprietors and freelancers report their business income and expenses to figure out their profit or loss.
Read guideWhat Is Self-Employment Tax?
Self-employment tax is the 15.3 percent you pay to fund Social Security and Medicare when you work for yourself instead of for an employer.
Read guideWhat Is a W-2?
A W-2 is the form your employer sends you each year showing how much you were paid and how much tax was withheld from your paychecks.
Read guideWhat Is Form 1040?
Form 1040 is the main U.S. individual income tax return, where you report your income, claim deductions and credits, and figure out your refund or balance due.
Read guideQuarterly Estimated Taxes, Explained
Quarterly estimated taxes are payments you send to the IRS throughout the year when no one is withholding tax from your income for you.
Read guideStandard vs Itemized Deduction
You can lower your taxable income with either the standard deduction or by itemizing specific expenses, but you must choose one, not both.
Read guideWhat Is the QBI Deduction?
The QBI deduction lets many self-employed people and small business owners deduct up to 20 percent of their qualified business income.
Read guideThe Home Office Deduction
The home office deduction lets self-employed people deduct expenses for a part of their home that is used regularly and exclusively for business.
Read guideStandard Mileage vs Actual Expenses
When you use a vehicle for business, you can deduct the cost using either the standard mileage rate or your actual expenses.
Read guideWhat Is an EIN?
An EIN is a federal tax identification number for a business, working much like a Social Security number does for an individual.
Read guideWhat Is Schedule SE?
Schedule SE is the tax form used to calculate the self-employment tax you owe on your net business profit.
Read guideWhat Is a 1098?
A 1098 is a tax form that reports the mortgage interest you paid during the year, which may be deductible if you itemize your deductions.
Read guideWhat Is Estimated Tax?
Estimated tax is how you pay tax throughout the year on income that does not have tax withheld from it, such as self-employment or investment income.
Read guideWhat Is a Tax Write-Off?
A tax write-off is a deductible expense that reduces the income you are taxed on, which lowers your tax bill but does not make the purchase free.
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