Posted on 11/23/2021 3:56:25 PM PST by newnhdad
In need of self employment advice- 1099 contractor.
Noooooooo! Keep track of everything all during the year so you know your tax position. 😁
You’ve received many excellent responses.
So I’ll repeat the one that will benefit you over the long run: find an independent CPA who is competent, friendly, and willing to answer your calls. You won’t need to call that person often, but it’s a relationship worth every penny it costs you. The CPA will provide you envelopes and coupons to send your quarterly tax payments to the feds. And guide you through decision making re: becoming a corporation or just filing a Schedule C.
Best of luck, Newnhdad!
I kept 12 file folders, one for each month. Easier if you want to look something up. Bills come in monthly too so it’s a good way to track expenses/income/profit on a regular basis over the year.
My business was a little seasonal. I worked in the sign business and holidays were slow aside from the service end. I would go Christmas shopping to buy stuff for the business/myself and reduce my tax burden at the end of the year.
Depending on where you live, taxes (including social security) are going to be close to 50% of your ‘income’. No match for retirement money, you’ll need to fund retirement yourself.
So what ever you get paid, expect to be able to use about half of it.
Most definitely have a good account! I’ve been a 1099 for five years. I do gig work and it’s freaking amazing amazing. I keep every receipt and I send in quarterly taxes
Number one advice is to marry someone with employee paid family medical insurance. J/k, but it really, really helps.
I hated paperwork, so I put most every expense on a USAA credit card, who issue a year end report with everything itemized. A Godsend. Pay on time, of course.
Other cards may do the same.
Should have been an importer / exporter. /Seinfeld
😜
No offense intended. Sounds like you did real well. 👍👍👍
If it’s really a great opportunity then don’t be afraid of the taxes, just know that you owe them like you would if it was a paycheck, only you are going to be responsible to pay them.(every 3 months instead of weekly). Really not a big deal with proper preparation.
Find an accountant. Get yourself familiar with IRS forms, 1040, Schedule C, Schedule SE. and 1040-ES, and possibly others depending on what you are doing. Use 1040-ES payment coupons on Jan 15, April 15, June 15, Sept 15 to mail in your quarterly taxes. Use IRS tax tables in the instruction book or online along with the forms I mentioned above and if you put in the correct gross income numbers you will have a good idea what to pay.
Bonus if you drive for this and can write off mileage. Turbo Tax is probably worth the $150 as a fall back if you don’t feel up to it. They will walk you through it and prompt you to find deductions you might not think about. They might include your State Taxes free.
My point is don’t pass it up over taxes, they are easily taken care of. Just takes diligence.
They do. You need to have a separate card for business just in case you are audited. With the 80 bazillion IRS auditors being hired you need to be squeaky clean.
Ditto
I will be working directly with clients assigned from my “employer” who will be paying me monthly. I will be working, 90+ percent from my home office and I will be incurring expenses for new computer(s) a printer and possible a back-up drive. They chose this route as a probationary period of six months after which they would extend the offer for full-time employment. One of the principals is a former boss who suggested I join him and his partner. The salary is higher, than my current job, but not sure about the tax implications.
My expenses were minimal...if it worked for 40 years...it was probably the right thing for me.
I went Sub-S Corp for 23yrs, with 604 employees over that period. 1099 wouldn’t have worked.
Get a decent CPA that will set you up and it’s a breeze. I pay mine about $75/mo and they do all my monthly/quarterly taxes (my annual taxes cost me more). I also highly recommend you get incorporated (ie Newndad LLC) which should save you good money. You’ll pay yourself a salary and your cpa can, again, set that up.
I’ve been a 1099 since 1989 and I LOVE it. I would have it no other way as you really control your own density (purposely misspelled :D)
we are on my wife’s insurance right now so that’s covered and life insurance is only a few dollars a month through the current plan holder.
Lots of good advice here. I’ll add this.... Set up a company bank account and credit card . separate personal money from company money. Be sure to pay yourself with a company check. Keep good books. Don’t get lazy with it. Also many times you might not get a 1099 from a job. Keep track of the money . the irs will find you and the penalties and interest are expensive .
Being self employed is great. You’ll probably work more than ever before. But the freedom is worth it. Good luck. I’ve been at it since 2005.
From a mortgage lending point of view, you will need two years of that income history if you are planning to get a loan .
But Jerry. I always wanted to pretend to be an Architect.
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