eTax.com How to File as Self-Employed

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Many people who carry on a trade or business are self-employed. Sole proprietors and independent contractors are two examples of self-employment.
Self-employment can include income you received for part-time work. This is in addition to income from your regular job.
You must file a Schedule C, Profit or Loss from Business. You may have to pay self-employment tax as well as income tax if you made a profit. Self-employment tax includes Social Security and Medicare taxes. Use Schedule SE, Self-Employment Tax, to figure the tax. If you owe this tax, make sure you file the schedule with your federal tax return.
You can deduct expenses you paid to run your business that are both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and proper for your trade or business.
Some of the common expenses include; office rent, internet and phone, health insurance premiums, meals and entertainment, travel, auto expense, interest, and retirement plan contributions.
In most cases, you can deduct expenses in the same year you paid for them, or incurred them. However, you must 'capitalize' some costs. This means you can deduct part of the cost over a number of years.