If you've moved past the occasional side gig into steady work for yourself ( under your own name, selling regularly, building a client list), the tax system treats you as a business, even a business of one. That changes what you're taxed on, what you owe, and what you're expected to keep track of. If you're newer to this and mostly do app or platform work, start with Taxes for Gig and 1099 Work; it covers the starter system of setting money aside and paying quarterly.

You're taxed on profit, not revenue

The tax system doesn't tax every dollar your work brings in. It taxes your profit: what's left after the legitimate costs of doing the work come off the top. The expense categories that matter for (mileage, supplies, platform fees, the work share of your phone or internet) apply here too, plus whatever your particular business genuinely requires to run. Every documented expense lowers your , which makes your records worth real money.

Save receipts and keep a running log. A basic spreadsheet or a cheap app is plenty. You need the totals at filing time, and you need proof if anyone ever asks.

What is

At a regular job, (the that fund and ) gets split between you and your employer. When you work for yourself, you're both, so you cover both halves. That combined amount is called self-employment tax, and it comes on top of the regular income tax you'd owe anyway.

It sounds harsh, but it's the same Social Security and Medicare everyone pays. You're seeing the whole bill instead of half of it. It's also the main reason a tax bill on self-employment income runs bigger than people expect.

Run it like a business

Because no employer is anything, the discipline has to come from you, and a few habits do most of the work:

  • Keep a separate account for tax money. Each time you're paid, move a set share into it; many freelancers park somewhere around a quarter to a third of each payment to be safe. Live on the rest as if the tax portion was already gone.
  • Pay as you go. Once you earn a meaningful amount on your own, the government expects rather than one bill in April. Paying quarterly avoids a penalty and keeps the balance from piling up.
  • Log expenses as they happen, not in a panicked reconstruction the week taxes are due.

Two habits cover almost everything: set aside a share of every payment for taxes, and track your work expenses. Do those, and self-employment taxes become routine paperwork instead of a yearly crisis.

Working for yourself is a real way to build skills and income. Handle the tax side from the start, and if a year ever ends with a bill you can't cover, there's a playbook for that too.