You have to create a business name, preferably 3 choices in case there will be other business that is under the chosen business name of yours, so you will still have other option.  As an individual, we are given our own name for others to identify who we are, the same with obtaining a business name it will help you and your business be distinguished and be identified.

You may be required by the county office or state to use a fictitious name to avoid confusion on the customers’ part.

You need to fill out a form to register and provide necessary documents to support your registration and pay the necessary fees at a county office. You have to confirm what organization it will be, whether it is a proprietorship, corporation, cooperative, partnership or a non profit organization. After filling the registration name you need to get an Employer Identification Number for tax purposes.

Obtaining business license and permits is also important to complete the legalization of your business. This will allow your business to operate, whether you are providing service or selling products.

Registering a trademark will also protect your business and the service or product that you cater. This is applicable to a company logo or if you have business style of your own and someone copied the exact style then you will have the power to sue them. It may take a year or so for the approval of the trademark but it is worth the wait.

But who really pays a self-employment tax?

Individuals who own an entity may be mandated to pay these taxes in the amount combined which was 15.3% of their total earnings. A sole proprietor is the one who will pay the self employment tax on both the loss and income of his sole proprietorship.

A general partner in a partnership will also pay self-employment tax on the payments that he will receive from the said partnership and his share with the loss and income of the said partnership. Meanwhile, a limited partner will only pay self-employment tax on the guaranteed payments that he will receive from the said partnership as a compensation for all the services that he rendered to the partnership.

On the other hand, the member of Limited Liability Company which is treated like an S corporation or partnership will be paying this self-employment tax depending on the guaranteed payments that he will receive from the LLC and also of his distributive share of the income and loss of the LLC in case he participates in its management. Meanwhile, those who do not participate in the LLC’s management will just pay the tax on the payments that he will receive as a compensation for what he has done for the LLC. All of these individuals are entitled to pay the self-employment tax.

In case you want to reduce your self-employment tax, there are also ways that you can do to achieve this. Number one on the list is through keeping your records accurate. This is actually one of the most vital ways in order to reduce your self-employment taxes. In order to claim these deductions, you will need your books and receipts. You can already deduct all of your business expenses such as travel, mileage, supplies and materials from your income. Just make it certain that business expenses will not be listed as income.

Second, you must now make use of the self-employment deduction. 50% of your recorded self-employment tax can be claimed as federal income tax deduction. Although it does not lessen your self-employment taxes, it can also diminish your total tax burden.

The next thing that you can do is to claim your deduction in health insurance. The next step is to take into consideration the option of incorporating instead of sole proprietorship. This will change how your income is being reported. Next thing that you can do is to file and pay every quarter your estimated taxes. This way, you can avoid late payment fees and penalties for your self-employment taxes.
In reducing your self-employment tax, you can do it all by your own by using a tax software or you can also have the choice of consulting an accountant.

Due to this situation, many people with disabilities and other chronic health conditions opted to start their own businesses. Making self employment work for people with disabilities is no longer a difficult thing to do. Self employment has allowed people with disabilities have the freedom to work at the pace that they set in a kind of environment which can accommodate all of their special needs.

When you have your own business, you also have the flexibility that is very important especially for those who need regular medical attention, accessible work space, flexible hours and other special considerations.

Although there will always be difficulties just like in any other kind of business venture, it still gives individuals with chronic health conditions and disabilities a flicker of hope of being able to live sufficiently without having to depend on others.

According to the facts gathered by US Department of Census, disabled individuals are twice as expected to start their own business compared to individuals who are physically able. However, starting a business is not really for everyone. It needs a lot of commitment of energy, resources and time. Making self employment work for people with disabilities need some sacrifice and a lot of willingness to learn if you want to achieve success.

And just like any businesses, the business of a self-employed individual must also be reported, associated with his own income report. But how do self-employed persons report their income?

Sole proprietors, independent persons and contractors and self-employed individuals with net earnings starting from $400 and above are mandated to pay their self-employment tax through PDF of Schedule SE which is attached to Form 1040 US Individual Income Tax Return. Church employees who receive an income starting from $108.28 and above but are not receiving Form W-2 for their earnings are also required to pay their self-employment tax with the same requirements mentioned.

Self-employed individuals and independent contractors are mandated to report expenses and income on C-EZ (PDF) or Schedule C (PDF). Your net profit as a self employed may also be subjected to SE tax. You must file an accomplished Schedule SE affixed to Form 1040, US Individual Income Tax Return.

If you are a member of a certain partnership carrying business or trade or of Limited Liability Company which opts to be treated as a kind of partnership, your share of that business’s loss and income must be included in your self-employment net earnings. Filing of this is just the same with the first two mentioned.

In case you have some employees, you will be paying employment taxes such as Social Security, Medicare and Federal income taxes. In the event that you are manufacturing or selling specific products, operating businesses of various kinds, using equipments, products or facilities or receiving payment for services, you will have to pay excise taxes.

Being self-employed does not mean that you are exempted from paying your citizen dues. These taxes are used for the benefit of not only you but other citizens of your country as well.