Here’s a breakdown of Points and Authorities related to self-employed taxes in the U.S., citing the Internal Revenue Code (IRC), IRS publications, and relevant legal doctrines. These are typically used in legal briefs, so they’re presented in a formal structure.
POINTS AND AUTHORITIES – SELF-EMPLOYED TAXES
I. Self-Employment Tax is Mandated by Federal Law
Point
Individuals who are self-employed must pay self-employment tax, which covers Social Security and Medicare contributions.
Authorities
- 26 U.S.C. § 1401 – Rate of tax.
Imposes self-employment tax on the self-employment income of individuals. - 26 U.S.C. § 1402(a) – Definition of net earnings from self-employment.
Defines self-employment income as gross income derived from any trade or business, minus allowable deductions. - IRS Publication 334 – Tax Guide for Small Business.
Provides detailed guidance on computing and paying self-employment tax. - IRS Publication 505 – Tax Withholding and Estimated Tax.
Explains how self-employed individuals must make estimated tax payments quarterly.
II. Filing Requirements for Self-Employed Individuals
Point
Self-employed individuals must file an income tax return if their net earnings from self-employment are $400 or more.
Authorities
- 26 U.S.C. § 6017 – Self-employment income tax returns.
Requires filing if net earnings from self-employment exceed $400. - IRS Form Schedule SE (Form 1040) –
Used to compute and report self-employment tax.
III. Deductibility of Business Expenses for Self-Employed Taxpayers
Point
Self-employed taxpayers are allowed to deduct ordinary and necessary business expenses.
Authorities
- 26 U.S.C. § 162(a) – Trade or business expenses.
Allows deduction of all ordinary and necessary expenses paid or incurred in carrying on a trade or business. - 26 U.S.C. § 62(a)(1) – Adjusted gross income defined.
Adjusts gross income by deductions attributable to a trade or business carried on by the taxpayer. - IRS Publication 535 – Business Expenses.
Explains deductible expenses for self-employed individuals.
IV. Deduction for One-Half of Self-Employment Tax
Point
Self-employed individuals may deduct one-half of their self-employment tax as an above-the-line deduction.
Authorities
- 26 U.S.C. § 164(f) –
Provides for the deduction of one-half of self-employment tax when computing adjusted gross income. - IRS Instructions for Schedule SE (Form 1040) –
Explains how to calculate and claim this deduction.