If you are asked to complete a Form W-9, most probably next year you will also receive a Form 1099-MISC for income that might be subject to self-employment tax.
Self-employed individuals generally pay income tax as well as self-employment tax (SE tax). Self-employment tax consists of two parts - Social Security and Medicare tax. It is similar to the Social Security and Medicare taxes withheld from the paychecks of most wage earners (W-2 employees).
You calculate your self-employment tax on Schedule SE and report that amount in the "Other Taxes" section of Form 1040. In this way, the IRS differentiates the SE tax from the income tax.
Tags: Tax Tips, Tax, Income Tax, San Diego, California, Self-employment Tax, SE tax, W-9, 1099-MISC, FICA, W-2