I just started working as a 1099 contractor this year and I’m trying to figure out how to handle taxes properly. Any advice or tips would be greatly appreciated. Thanks in advance!
Keep track of everything! What kind of work are you doing?
Hollis said:
Keep track of everything! What kind of work are you doing?
I’m pretty new to this and don’t know much about taxes as a 1099 contractor. I do residential inspections for three companies—basically taking photos and getting paid well for it.
@Shiloh
Tracking mileage is going to be important for you. Do you know how to track it? Do you have a home office or work mostly on-site?
Also, consider opening a separate bank account for your business income and expenses—it’ll make tax time a lot easier. But keep personal vehicle expenses separate unless you’re using the actual expense method for deductions.
@Hollis
I’m not sure how to track mileage. Someone suggested writing down the odometer reading at the start of the year. I don’t work from home or do editing—just take photos using an app provided by the companies I work for. My main expenses are truck maintenance and gas. I’ve heard meals don’t count unless they’re at sit-down restaurants?
Zola said:
@Shiloh
Have you considered a home office deduction?
I’m not familiar with that. Can you explain?
Zola said:
@Shiloh
Have you considered a home office deduction?
I’m not familiar with that. Can you explain?
If you use part of your home for work, you can deduct a percentage of your rent or mortgage based on the square footage of your home office compared to the total size of your home. For example, if your home is 2,700 square feet and your office is 300 square feet, you could deduct 11% of your rent as a business expense.
Zola said:
@Shiloh
Have you considered a home office deduction?
They mentioned not working from home, so it might not apply.
@Shiloh
Meals aren’t deductible unless they’re for business purposes and meet specific criteria. As for mileage, you need detailed records for each trip. Apps like Everlance or MileIQ can help. Do you have a regular work location?
Shiloh said:
@Hollis
I don’t have a fixed work location. Do you recommend any apps or tools to help?
If you’re traveling directly from home to job sites, some of that mileage might not be deductible. Try Everlance or MileIQ to keep track. They’re pretty easy to use.
@Hollis
Thanks for the tip! Do you have any reading materials or videos you’d recommend for learning more about taxes as a 1099 contractor?
Shiloh said:
@Hollis
Thanks for the tip! Do you have any reading materials or videos you’d recommend for learning more about taxes as a 1099 contractor?
Start with the instructions for Schedule C and some of the IRS business-related publications. Also, this forum has great advice—just ask about anything you don’t understand.
Shiloh said:
@Hollis
Do you have links to the instructions you mentioned?
You can find them on the IRS website. Just search for Schedule C instructions—it should pop right up.
Look into quarterly taxes. If you didn’t pay them this year, you might owe a penalty, which is pretty common for new 1099 workers. You’re also responsible for both your Medicare and Social Security taxes, which adds about 8-9% on top of your income tax.
Good news is you’ll likely qualify for the 20% QBI deduction, which helps lower your taxable income. If you’re able to save, consider a SEP IRA—it’s tax-deductible, and you can contribute until April for the previous tax year.
@Soren
Thanks for this. I’ll definitely read up on quarterly taxes and deductions. Do you have suggestions for books or videos to help me learn more? I see myself staying a 1099 for a while and want to avoid mistakes.