Elizabeth Ayoola

So Sean and I are tackling this question solo today, and that's because the tax team is busy getting us prepped for our favorite season, tax season.

This is your chance to say yay, Sean.

Now back to the question for today.

I nerded out when I read this question because I have so many related lived experiences, which I'm going to share later in the episode.

Now, Sean, you are officially a business owner now yourself, so you might have some related experiences too.

Finally, something that we can share.

No, it's not.

I personally think that determining your tax status is pretty straightforward.

But actually, I did read on the IRS website that incorrect filing status is one of the most common mistakes that people make.

So maybe I am mistaken.

Status aside, another important thing that you should be aware of when you're filing your taxes as a contractor is your self-employment category.

Elizabeth, girl, what are you talking about?

I'm going to explain soon.

So you need to know which category that you fall into so your income is properly reported to the IRS.

Now, the IRS recognizes five primary business categories.

All right, Sean, pop quiz, Mr. CFP, what are they?

Ding, ding, ding!

All right, so Sean, you did get all those right, but you do not win anything but bragging rights.

I'm sorry.

I do want to add that the business categories also tell you what forms you need to file with your personal income tax return, which is also important.