Self Employed Person

Definition

  • An individual who owns and operates a trade or business rather than working as an employee for company. You are self-employed if you are a sole proprietor or a partner working in a business. You can be an employee and self-employed at the same time if you have an independent business outside of your regular employee hours. To qualify for many business tax exclusions and deductions, the business must make a profit in three of five years. In most cases, to qualify you must take and average of the last two - three years tax assessments.

Synonyms
business owner, your own boss, subcontractor, free agent, freelance

Acronyms
SEP

Alternate Spellings
Sole proprietor, Entrepreneur, Self Employed

Related Terms and Acronyms

  • Business Bankruptcy Definition,
    • A bankruptcy case in which the debtor is a business or an individual involved in business and the debts are for business purposes.
  • Business Interest Expense Definition,
    • Interest acquired in business operations can be deducted as a business expense.
  • Commercial Loan Definition,
    • A loan taken out by a business.
  • Commercial Mortgage Definition, Very Important,
    • A mortgage for commercial property.
  • Earned Income Definition,
    • Money earned through wages, salaries, tips, net earnings (if self-employed), and any other income received for work or personal services. Investment income, such as dividends and interest, is not counted as earned income.
  • Entrepreneur Definition,
    • A person who starts and manages a business.
  • Lease (lse) Abbreviation,
    • A written agreement in which the property owner allows a tenant to use property in exchange for rent, and for a specified period. Or, a written agreement in which a car dealer allows a consumer to use a vehicle in exchange for payments for a specified period.
  • Loan Definition,
    • Letting another party use something of value temporarily.
  • Low-documentation Loan Definition,
    • A mortgage that requires less income or asset verification than conventional loans. Low-documentation loans are designed for the entrepreneur or self-employed, for recent immigrants, or for borrowers who cannot or choose not to reveal their financial information. A substantial down payment and excellent credit history are generally required. This type of loan will also yield a higher interest rate.
  • Meals and Entertainment (M&E) Acronym,
    • Deductible expenses in your business such as the cost of taking a client to a restaurant (meals) or a sporting event (entertainment). However, these expenses are only partially deductible (50 % in Canada).
  • Mortgage (mtg) Abbreviation, Important,
    • A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
  • Proprietor Definition,
    • The owner of a business or property.
  • Small- and Medium-sized Enterprises (SMEs) Abbreviation,
    • Limits banks place on businesses to determine there size.
    A term widely used by the World Bank and the World Trade Organization (WTO).
  • Sole Proprietorship Definition,
    • A business owned by an individual where no legal distinction is made between the business and the owner.
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