More than 25.5 million taxpayers who filed individual 2016 income tax returns reported non-farm sole proprietorship activity. That’s a 1.2% increase from 2015. Total profits from non-farm sole proprietorships decreased 2.4% during this time, although total profits as a percentage of business receipts were 23.1%, the second-highest level in this data series that began in 1988.
Self-Employed
The IRS defines non-employer business as subject to federal income taxes with annual business receipts of $1,000 or more ($1 or more in the construction industries) and no paid employees. Most non-employers are self-employed individuals operating very small unincorporated businesses, which may or may not be the owner’s principal source of income.
Talk to a tax pro about ways you can reduce taxes if you have self-employment income. Newer tax laws, including the pass-through provision, could help the self-employed reduce their tax liability.