• New Reporting Threshold: In 2023, the IRS has established a new threshold. If your earnings reach or exceed $600 across any number of transactions by tax filing time, you will receive a 1099-K. Ensure accurate tracking of your Contra earnings, regardless of the amount.

Recent IRS Update: 1099 Reporting Guidelines

Despite ongoing discussions about potential changes to 1099-K reporting, the IRS has maintained the reporting threshold at $20,000 for 2023. Any proposed reduction to $600 has been deferred until the 2024 tax year. Stay informed to effectively manage your Contra taxes.

Understanding Contra Taxes

Before delving into specifics, it's crucial to understand the concept of Contra taxes. As an individual earning income through Contra, you bear tax responsibilities related to the income you generate.

Who Needs to Pay Contra Taxes?

Individuals earning income through Contra are responsible for Contra taxes. The new $600 earnings threshold underscores the importance of accurate tracking for tax reporting.

How Will Contra Deliver Your 1099s?

Upon reaching the $600 earnings threshold on Contra, the platform will issue a 1099-K form. Typically, these forms are sent electronically through your Contra account. Ensure your contact and tax information are up-to-date for prompt receipt.

Which Tax Forms Are Necessary?

• 1099-K: Outlines your gross revenue from Contra transactions.
• 1099-MISC: Additional income, such as bonuses, may be reported on this form.
• Schedule C: If you operate as an independent contractor, filing Schedule C is essential for reporting self-employment income and deductions.

How Can You Minimize Contra Taxes?

• Deductions: Identify eligible business expenses related to your Contra activities, such as website maintenance or subscription costs. This helps reduce your taxable income.
• Quarterly Payments: For substantial Contra revenue, consider making anticipated tax payments quarterly to avoid penalties at year-end.
• Education Expenses: If you incur costs for improving your contracting skills, explore potential deductions to minimize your overall tax obligation.

What Write-Offs Can You Claim for Contra?

• Website Costs: Deduct expenses related to maintaining and promoting your Contra profile, including hosting fees and domain costs.
• Subscription Fees: If you pay for premium features or services on Contra, these costs may be eligible for deduction.
• Equipment Expenses: Deduct the cost of equipment or software necessary for your contracting work on Contra.

When Do You File Your Contra 1099 Taxes?

• January 31: Contra typically sends 1099-K forms by this date. Ensure your contact information on your Contra account is accurate for swift receipt.
• April 15: File all necessary tax forms by this date to meet IRS deadlines. Consider seeking professional assistance to ensure accurate filing.
• Quarterly Estimated Taxes: For individuals with substantial earnings through Contra, consider making quarterly estimated tax payments to prevent a large tax bill at year-end.

FlyFin Support: Your Partner in Tax Season

• Explore FlyFin's comprehensive suite of tax solutions for Contra professionals. Our dedicated team is ready to assist you at every step of your tax journey.

What’s FlyFin?

FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors. But anyone can file taxes through FlyFin! FlyFin tracks all your business expenses automatically using A.I. technology. Then, our CPA team files a guaranteed 100% accurate tax return for you – to save you a couple thousand dollars and a ton of time on your taxes. In addition, you can download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and money.