The first tax bill after going into business for yourself is almost always a shock, and the reason is structural rather than arithmetic. This article explains why self-employment tax exists, how it doubles the payroll tax an employee sees, and why the quarterly estimated payment system catches so many people in their first year. It covers how each entity form is actually taxed, the reasonable compensation question that drives most S corporation audits, and the payroll obligations that create the only tax liability an owner can never escape. Separate parts address what is genuinely deductible and what is not, the depreciation and expensing choices that shift income between years, the recordkeeping that determines whether a deduction survives examination, and how a business audit actually proceeds. It also explains worker classification from the tax side, where the consequences fall on the business rather than the worker. Examples run throughout. The article is written for owners, freelancers, and lawyers advising them.