Most of us moms here on Bizymoms.com are self-employed women who are their own bosses. So how would the tax rules apply to us? Let's examine.

In the case of running your own business which is entirely owned and operated by you, you are a sole proprietor. If you are doing the business in partnership with other(s), you are in a partnership. In both cases, you will be considered as self-employed. If you are involved in part-time business in addition to your regular job, you would still be considered as self-employed.

If you are providing your services to a client who only has the ability to control the result of the work and not what will be done or how it will be done, then you are considered an independent contractor. For example, a lawyer would provide his professional services to the public, but he may not be an employee.

Whether you are a sole proprietor, partner or independent contractor in business for yourself, the self-employment taxes apply to you. You must have a taxpayer identification number to carry out your business. If you have any employees working for you, you would also need an Employee Identification number.

Depending on your type of business, you may have to fie multiple tax forms. If your are self-employed and have net earnings of more than 400 USD, you will be required to attach a SE Schedule to your Form 1040 U.S. Individual Income Tax Return. You will also be required to report your expenses and income on a Schedule C or C-EZ. If you are in a partnership (and self-employed), you will be required to submit a Form 1065, U.S. Return of Partnership Income and a K-1 reporting each partner's net income or loss. You must also file a completed Schedule SE attached to your Form 1040, U.S. Individual Income Tax Return.

In the case of you having employees, you must pay Social Security, Federal Income and Medicare Taxes. This is 7.65% of the employee's income. Usually in the case of self-employment, the individual is both the employer and the employee. Therefore, the self-employed are required to pay both parts of the FICA tax which covers Social Security and Medicare. This is 15.30% in total of the income.

Self employed people are sometimes eligible for more deductions than a normal employee. Travel, uniforms, cost of running a home office can all be considered as deductions, but it is best that a tax expert is consulted before filing these.