Self-employment includes, but is not limited to, running one's own business, trade, or profession. Examples of self-employment include: providing day care, mowing lawns, shoveling snow, selling Avon products, selling eggs, and renting a room in one's home.
To identify self-employment, the CAO will determine who is responsible for withholding taxes from the person's earnings. If another person is responsible for withholding Social Security and income taxes from an employee's earnings, the person is not self-employed. If a person must send his or her own monthly or quarterly payments to Social Security and the IRS, he or she is self-employed.
Examples:
Sue is a housekeeper for the Weavers. The Weavers pay Social Security and income taxes for Sue. The Weavers are Sue's employer. Sue's income is not from self-employment.
Dean cuts grass for Jim Johns and Jose Carabello. Dean is responsible for making quarterly payments to Social Security and the IRS. Dean's income is from self-employment because Mr. Johns and Mr. Carabello do not pay taxes for Dean.
Reissued September 21, 2012, replacing January 31, 2012; reviewed March 1, 2018