Your employer withholds federal income tax, Social Security (6.2% up to $176,100), and Medicare (1.45% + 0.9% additional on income over $200K/$250K MFJ). Reported on Form W-2.

Tax rate: Ordinary income rates (10%-37%)

If you're a freelancer, contractor, or sole proprietor, you report income on Schedule C. You pay self-employment tax of 15.3% (12.4% Social Security + 2.9% Medicare) on net earnings, but you can deduct 50% of SE tax.

You may qualify for the Qualified Business Income (QBI) deduction — up to 20% of qualified business income (Section 199A). Phases out above $197,300 single / $394,600 MFJ for service businesses.

Key forms: Schedule C, Schedule SE, Form 1099-NEC

Short-term (held ≤1 year): Taxed as ordinary income (10%-37%)

Long-term (held >1 year): Preferential rates:

• 0%: Up to $48,350 single / $96,700 MFJ
• 15%: Up to $533,400 single / $600,050 MFJ
• 20%: Above those thresholds

Net Investment Income Tax (NIIT): Additional 3.8% on investment income above $200K single / $250K MFJ.

Capital losses can offset gains. Up to $3,000 of excess losses can offset ordinary income ($1,500 MFS). Unused losses carry forward.

Qualified dividends (from US corporations, held 60+ days): Taxed at the same preferential rates as long-term capital gains (0%, 15%, or 20%).

Ordinary dividends: Taxed at your regular income tax rate.

Reported on Form 1099-DIV.

Reported on Schedule E. You can deduct mortgage interest, property taxes, insurance, repairs, and depreciation. Depreciation for residential property is over 27.5 years.

Passive activity rules apply — rental losses generally can't offset W-2 income unless you're a real estate professional or your AGI is under $100K (up to $25K special allowance).

The IRS treats crypto as property. Every sale, trade, or use is a taxable event. Short/long-term capital gains rules apply.

Mining income is taxed as self-employment income at fair market value when received.

Staking rewards are taxable as ordinary income when received.

You must answer the digital asset question on Form 1040.

Up to 85% of Social Security benefits may be taxable, depending on your "combined income" (AGI + nontaxable interest + 50% of SS benefits).

• Single: Below $25K = 0% taxable; $25K-$34K = up to 50%; above $34K = up to 85%
• MFJ: Below $32K = 0%; $32K-$44K = up to 50%; above $44K = up to 85%