Is it earned income, capital gains, other? If earned, is it self employed or wages?
Good question. It would count as self-employed.
lhamo is on the right track, particularly with regards to sheltering the taxable income with step 2. First you need to consider expenses because you are only taxed on the net income. So start tracking everything and read through schedule c and its' instructions. Can you defer some of the income into 2015 to spread it between two years? A sep-ira is a good step-read the rules on that and keough, and simple ira. They are all different but will help defer some of this. A solo 401k could also be good but might be limited if you've already maxed out work plans.
The SE income will either be attached to you, your husband, or both and this is important. If it's all yours, your husband can't use it to max a sep ira for him, only you can. In any case, there are only a few circumstances where you can defer more than $52k for one person in a year between all the different tax deferral vehicles. The easiest exception is to be over 50 years old.
Congrats on the windfall, and please send me a PM if you need to. I still owe you one OT.
