How do you define self employed for tax purposes ?

Question

I used to have a small business in my home for about six years. Then I completely closed it. During this period I filed my tax returns as a single unmarried "self employed" person.

Since then I have lived on savings & had no income from business nor have I worked for anybody for a salary for couple of years.

When I file my tax returns for last two years, am I considered self employed & do I have to file as "self employed" ?

If yes then now onwards if I don’t want myself to be considered as self employed & not want to file as "self employed" what do I need to do ? I am single & unmarried.

Answer 1

There is no such category as Single unmarried "self-employed" person. You don't file as "self-employed."

Your filing status is Single. You complete your tax return form 1040A or 1040EZ or 1040.

If during the year, you have any income from self-employment, then you also complete schedule C of Form 1040A/1040EZ/1040. If you don't have any self employment income, then you don't complete and attach schedule C.

Answer 2

There isn't a filing status of self-employed. If you have income from self-employment, you file a schedule C with your 1040 showing your business income and expenses. If you don't have any income from a business, since it's closed, you don't file a schedule C for self-employment - there wouldn't be anything to put on it.

If you are living on savings, you might not even have to file. If you have to file because of interest or investment income, then you would just file the standard required forms - some version of 1040, and whatever other schedules (B, D, E?) that might be required for your source of income.

Answer 3

Self-employed could mean that you operate your own business in your home. It can also mean that you receive payment as a non-employee for providing goods or services.

You have not worked for anybody for a salary. Did you receive payments for goods or services you provided? That would make you self-employed for those payments. You would file Schedule C.

If you have no income from providing goods or services, but only investment income, then you would file your taxes showing only those sources of income. Your occupation would be retired or unemployed.

Answer 4

No, you are no longer self-employed. If you wish, you could classify yourself as "retired" or as an "investor", but since you are only living off of savings now, there is no reason why you should be paying any self-employment tax anymore.

Good luck to you.