A fractional CFO with three or four client retainers is not an employee of any of them. In the IRS's eyes you are running a business, and by default that business is a sole proprietorship. That one fact drives everything about how your income is taxed.
Schedule C collects every retainer in one place
All of your fractional income, the monthly retainers, the one-off projects, the interim engagements, gets added together and reported on a single Schedule C attached to your Form 1040. It does not matter that the money came from four different companies in four different industries. You also deduct your business expenses there: travel to client sites, professional liability insurance, executive coaching, software, and a home office if you qualify. What is left after expenses is your net profit, and that is the number the IRS actually taxes.
Because your clients treat you as a contractor, none of them withhold income tax, Social Security, or Medicare from your invoices. The gross amount hits your bank account, and the tax bill is entirely your job to handle.
The 15.3% self-employment layer
On top of ordinary income tax, net profit from fractional work owes self-employment tax, calculated on Schedule SE. The rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare. The Social Security portion stops once your earnings pass the annual wage base, which the IRS adjusts each year, while the Medicare portion continues on everything. You do get to deduct half of your self-employment tax as an adjustment to income, which softens the blow slightly.
This is the piece that surprises executives coming out of a W-2 role. As an employee, your employer paid half of those payroll taxes invisibly. As a fractional executive, you pay both halves, and it applies before your income tax bracket even enters the picture.
Board fees and advisor equity have their own rules
Cash board fees and advisory fees are generally self-employment income too, taxed the same way as your retainers. Equity is different. If a client grants you shares or options as an advisor, the value is typically taxed as compensation when you receive it or when it vests, and any growth after that is capital gain when you sell. Restricted stock can sometimes benefit from an 83(b) election filed within 30 days of the grant, which locks in the tax at the grant-date value. Equity grants are one place where the details genuinely matter, so get the paperwork reviewed before you sign.
Finally, because nothing is withheld all year, the IRS expects quarterly estimated payments on Form 1040-ES, due in April, June, September, and January. Miss them and you can owe an underpayment penalty even if you pay in full at filing time.