Schedule C Small Business

With the rise of Uber, Lyft, Doordash and other rides share and delivery service companies.  Along with freelance sites like Upwork and Fiverr the amount of people working in the Gig economy has exploded.   This is referred to as work on demand.  A person receives a 1099 NEC or 1099 K to record their income at tax time.   It is left to the worker to pay the federal and state estimated tax payments.  

This is what I call the unintentional business owner, because I don't believe these people are actually conscious of being a business owner.   They just want some quick money.

This is a very popular method used by many companies both large and small to avoid paying federal social security, medicare, federal unemployment taxes and state unemployment taxes.  Now, in fairness to the employer many have been told they can do this by offering the employee an option of working as a 1099 Contractor and getting all of their money.  Many people say yes, because they want all of their money.  However, whether an employee is a contractor deals with right of control.

However, when tax time come the contractor is unable to pay their taxes.  They have not filed estimated tax payments.  Now they owe taxes.  Many times, this goes on year after year creating a large tax debt for the taxpayer.

This is the person who has set out to open a business.  They may have a professional license like barber or a business license.  They have registered their business with the state.    However, many times they have the same problems as the first two categories.  They have have not paid their taxes.