Employment vs. Self-Employment

How do employees and self-employed individuals file their taxes?

Filing taxes as Employee vs. Self-Employed Individual

If you have been an employee since your first job or have never owned or operated a business, chances are, tax filing has been a topic and an activity that may be shrouded by mystery and a lot of misconceptions.

For Employees

To shed light on the mystery of tax filing for employees, since you have an employee-employer relationship with the organization you are working for, your employer has the responsibility of filing your taxes and applying deductions to your regular income.

This process is often carried out by the accounting department, which is why the trace of this process is only visible in the tax deductions stated on your pay slip.

For Self-Employed Individuals

Business owners, entrepreneurs, and freelancers are all Self-Employed Individuals who are responsible for running their businesses. A business can pertain to selling tangible products and merchandise or intangible goods like offering professional services for a client. These activities are considered “business activities” which automatically identifies all Self-Employed individuals as “business owners.”

In contrast with Employees, Self-Employed Individuals have the sole responsibility of filing their taxes and applying deductions to their received income. Self-Employed individuals are tasked to file their taxes and pay their dues promptly and accordingly.

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Disclaimer:

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