I worked at a regular job from Jan.-May of this year, and earned roughly $4,500 from that job. Starting in April I also started generating income from the web.. ebay, affiliate programs, etc. I have averaged $500/month since June.. leaving me with (so far) $6,500; With a projected income of about $9k-$10k for this year.
When I filed my return last year, I made 15k (before taxes) and got a refund of around 6k (for my EIC).. so I know I won’t be expecting close to that amount this year because I didn’t make as much money, but.. will my self-employed earnings count towards my EIC payout as income? Or will they only count the earnings I made at my regular job?
If I continue to be self-employed and it is my only income for the next year, will I still be eligible for EIC next year?
From what I understand I will file schedule SE with my 1040? Anyone with any advice, I’d greatly appreciate it. This will be my first time ever having to file taxes like this.
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Will I Still Get Eic If I Am Self-employed? How To File?
Posted on September 29, 2011.
EIC is calculated on your earned income.
Earned income is income from employment AND self-employment.
So, yes, your self-employment income counts.
On caveat…..self-employed individuals who claim EIC tend to get a closser look from the IRS so keep good records.
You will need to file a Schedule C to report your business income and expenses. Your net income from your business will be reported on Schedule SE, where you will have to calculate and pay self-employment taxes, which is something you need to be aware of if you have never been self employed.
EIC, or earned income credit, is from all earnings from employment, including self employment. So yes, your net earnings from self employment will count towards the calculation of EIC. However, some of this EIC will probably be used to offset the self-employment tax on your earnings.