Your own hustle · Module 1 of 3
Working for yourself
How self-employed income works, keeping business money separate, and pricing your work.
Key terms in Working for yourself
- Independent contractor
An independent contractor is a self-employed person who offers services to the public and controls how the work is done, while the client controls only the result. The Internal Revenue Service looks at behavioral control, financial control, and the relationship between the parties to decide whether a worker is a contractor or an employee. Contractors usually receive Form 1099-NEC and pay self-employment tax.
Source: Internal Revenue Service, Independent contractor defined
- Business bank account
A business bank account is an account used only for a business's income and spending, kept apart from the owner's personal money. The Small Business Administration notes that separate accounts support clean records and, for formal business structures, help preserve limited personal liability protection. Banks usually ask for an Employer Identification Number and formation documents before opening one.
Source: U.S. Small Business Administration, Open a business bank account
- Gross receipts
Gross receipts are the total income a business receives from its activities before any expenses are subtracted. The Internal Revenue Service lists supporting records such as invoices, receipt books, deposit information, and Forms 1099-MISC that show the amount and source of each payment. Gross receipts differ from profit, which is what remains after costs are taken out.
Source: Internal Revenue Service, What kind of records should I keep
Every term on Lever is in the money glossary.
About this module
Working for yourself is part of Your own hustle, one of 15 subjects in Lever. It’s a short run of 5 lessons, about 13 minutes in all, so you can finish it in one sitting.
Every lesson takes one idea at a time. You read it with the math worked out step by step, answer a question that puts it to use, then see why the right answer is right and why the others aren’t.
It’s for anyone who was never taught this, and you don’t need to know anything first. Every lesson is free. Lever works out what you already know, so you can start here or let your path bring you to it.
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It’s part of Your own hustle. Lever will bring it to you when you’re ready, or you can go straight there.