Income Tax:

Is a type of tax governments impose on the income that businesses and individuals generate. By law, taxpayers must file an income tax return annually to determine their tax obligations. 

State Income Tax:

South Carolina state Income tax is typically withheld from your paycheck by your employer on your behalf. If you are self-employed, you still have the same income tax obligations; however, it is your responsibility to report your income to the South Carolina Department of Revenue and submit payments. 

Some self-employed individuals may be required to pay quarterly estimated taxes depending on the amount of revenue they are generating. 

A video explaining the details of state Income tax, reporting, and quarterly estimated tax is below. 

Get started now- register your business with the South Carolina Department of Revenue by completing the Business Tax application on MyDORWAY. 

 

Federal Self-Employment Tax: 

According to the IRS, Small-business owners, contractors, freelancers, gig workers, and others who make more than a $400 profit must pay self-employment tax. Self-employed workers are taxed at 15.3% of their net profit. This percentage is a combination of Social Security (12.4%) and Medicare (2.9%) taxes, also known as FICA taxes.

Learn more about Federal Income Tax from the Internal Revenue Service.

 

 

Income Tax FAQs

It depends on how you registered with the Internal Revenue Service (IRS). For example, if when setting up your business, you kept it a Single Member LLC, you would need to report this on Schedule C, E, or F on your Individual Income Tax return.

If you registered your business with the South Carolina Secretary of State (SOS), you will need to file up until the entity’s dissolution date with the SOS.

Review your SS-4 and any paperwork (Form 2553) you submitted to the IRS afterward as this will state how your business was registered.

You need to provide the updated copy of your SS-4 from the Internal Revenue Service with the revocation of the Subchapter S election and verify that your status is now Single Member LLC and not C-Corporation.

Learn more about different Income Tax filing at the following South Carolina Department of Revenue links: