Do all sources of income listed by a taxpayer qualify as self-employment income?

Self-employment income is specifically defined as income earned from business activities in which an individual is involved on a self-employed basis. This includes income generated from services rendered, goods sold, or other business activities. However, not all types of income classified or reported by a taxpayer qualify as self-employment income.

For example, income derived from investments, pensions, and wages earned as an employee do not count as self-employment income. The distinction is important because only self-employment income is subject to self-employment taxes. Therefore, only certain types of income—specifically those that stem from self-proprietorship, freelance work, or contract jobs—qualify as self-employment income.

This makes it imperative for taxpayers to accurately classify their income to ensure compliance with tax laws and proper reporting. Recognizing that not all income sources are the same helps taxpayers navigate their tax obligations more efficiently and avoid potential misreporting.