Self-Employment Taxes
If you take a job as an employee (receiving a W-2), your employer splits payroll taxes with you. However, if you work as a freelancer, consultant, or gig worker (receiving a 1099), the Internal Revenue Service (IRS) considers you self-employed.
You will be responsible for the full 15.3% self-employment tax, which covers both the employer and employee portions of Social Security and Medicare taxes. You must also remember to make quarterly estimated tax payments to avoid underpayment penalties.
