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You can lower your income tax

Taxes are no fun when you are a freelancer, a self-employed individual or a 1099 contractor. You have to navigate through heaps of statements and paperwork just to confirm the tax you owe and then make the payment. Although the IRS provides instructions, you won't find an IRS billboard pointing you to ways to reduce, lower or completely eliminate your 1099 tax bill. That’s what FlyFin is for. Here we bring you five ways to lower your 1099 income.

Table of contents

The basics of a 1099 worker...Read more

How to reduce your 1099 taxes...Read more

How to deduct your self-employment tax from your income tax...Read more

Take Qualified Business Income deductions to lower your tax...Read more

How can a Retirement Plan Help You Save on 1099 income?...Read more

How can you avoid paying 1099 taxes?...Read more

The basics of a 1099 worker

Unlike a W-2 worker, self-employed workers need to ensure what they owe, pay their own taxes and file the IRS returns. If you are an independent contractor or self-employed individual, you should usually get a 1099 form from your employer. This employer could be anything from an online application like Postmates, Uber or Lyft, or it could be a company like Apple or Tesla that you freelance for. When it comes to filing taxes, you should always be on the lookout for ways to lower taxes on your 1099 income. A 1099 income could be any income you make outside of your full-time work. If you work as a part-time freelancer, you’ll get a 1099 form from the company that you work with. You may also work as a full-time self-employed individual and get a 1099 form.
Image showcasing examples of self-employed 1099 contractors including delivery drivers, nurses, photographers, coders, and designers. Keywords: freelancer, taxes.
The IRS has set the threshold for filing 1099 income tax returns at $400. So you’re required to file income tax returns if you earn $400 or more as 1099 income. For example, if you earn $30,000 from your full-time employer and $400 from your freelance activities, you’ll have to file a tax return on your 1099 income and pay the taxes on the $400 separately. Unlike W-2 employees, who only have to pay taxes once their income exceeds the $12,000 threshold of the standard deduction, 1099 contractors have to report their income starting from $400. As a 1099 contractor, you pay more taxes than a full-time employee because you pay the full 15.3% in FICA taxes, which employers normally split with employees. A W-2 employee has half of this 15.3% share contributed by the employer. As a self-employed individual, you don’t have this privilege. So you need to smarten up technologically for your taxes, and A.I.-enabled platforms like FlyFin have a massive role in saving you big on taxes.

Quick tip

If you use FlyFin, you can cut out manual labor since the smart application finds business expenses automatically.

How to reduce your 1099 taxes

Starting by minimizing your tax bill, always keep track of all your business expenses for deductions. You can write-off all qualifying business expenses from your tax bill. For example, if you are a freelance delivery driver you can keep track of:
  • Your business mileage
  • Keep you fuel bills from trips
  • Toll payments
  • Parking slips
  • Vehicle maintenance expenses
  • Delivery vehicle depreciation costs
  • Vehicle insurance expenses
You can check FlyFin delivery driver page to find more details on how you can lower your 1099 taxes, and be sure to utitlize a 1099 tax calculator.

How to deduct your self-employment tax from your income tax

You can deduct a massive chunk off your self-employment taxes because you’re also an employer. When the IRS requires you to pay 15.3% in FICA taxes, you can declare half of that amount as a write-off from your self-employment tax amount. It’s similar to a company paying its share of 7.65% as FICA tax and then declaring this as a business expense in the IRS return. The IRS also has a provision to include this by default in your Schedule SE. If you accidentally miss including it, the IRS will send you a refund after informing you of the mistake.

Take Qualified Business Income deductions to lower your tax

QBI is the pass-through income you make as a self-employed individual. The QBI deduction is available for eligible individuals like freelancers, 1099 contractors and business owners. You can lower your taxable income by as much as 20% using QBI, but you can’t lower your self-employment tax. To lower your self-employment tax, you need to use business write-offs, as mentioned above. To find the business write-offs, you can connect FlyFin to your bank statement and find all deductions automatically.

How can a Retirement Plan Help You Save on 1099 income?

The IRS likes when you save for retirement and has some deductions that help you lower your tax bill. You can avail any one of the following three options in this infographic:
Image with text about retirement plans for freelancers including Simple IRAs, SEP-lRAs and solo 401(K)s with savings up to $61,000. Relevant for self-employed and 1099 workers managing taxes.
Although you’ll pay taxes if you ever wish to use your retirement plan, it's a good way to save money that could take care of you in the future.

How can you avoid paying 1099 taxes?

All you have to do is stop being taxed as a self-employed person. If your income is high enough, you can create an S Corporation. The progressive U.S. tax system charges you more if you earn more. So if you are earning more than $100,000 every tax year, you better register your company as an S-Corp. This will allow you to set your own reasonable salary and the remaining amount could be the company profits. For instance, if you set the salary at $80,000, the remaining sum can be declared as your company’s profit. Although you’ll have to pay taxes on company profits, it will be less than the sum if you filed as a self-employed individual.

1099 and Taxes: A Guide for Self-Employed Individuals with 1099 Income

Taking care of your taxes as a self-employed person can be a difficult undertaking. The Internal Revenue Service (IRS) defines a self-employed person as someone earning income from an independent economic activity and is responsible for collecting self-employment taxes. Knowing how to manage self-employment tax and 1099 income is one of the most important things. We will explore the complexities of self-employment tax, its computation techniques, and ways to reduce your tax liability in this post.

IRS Penalties for Not Reporting 1099 and Taxes Income

Find out how to avoid the harsh penalties associated with failing to submit 1099 income to the IRS. Learn the value of precise and timely reporting to prevent expensive errors.

Form 1040

This is the most common document in the US tax system. It's the master tax return that every American fills out.

Form 1040 Schedule C

Running a business by yourself? This is the tax return 2024 schedule where you report how much (knock on wood) profit you made or how much you (heaven forbid) lost over the course of the year.

Form 1040 Schedule SE

SE stands for self-employment tax, and this is where people who make a living working for themselves or freelancing pay Social Security and Medicare taxes.

Form 8829

If you use your home for work, you can deduct things like utilities and supplies used for your home office or storage space used for inventory from your taxes. Use this form to figure out how much you can deduct.

Form 1099

If you're self-employed, this is the form that the people who pay you use to report those payments to the IRS. Here's what you need to know about it.

Losing a 1099 form

If you've lost a 1099 that was sent to you, fear not. Here's what you can do if it happens.

Form 1099-NEC

Entities that pay you for services as a freelancer or independent contractor report those payments to the IRS using this 1099 form.

Form 1099-MISC

Entities that give you other forms of income as a freelancer or independent contractor, such as prize money or money for healthcare, report those payments to the IRS using this 1099 form.

Form 1099-K

If you receive payments of $600 or more as a self-employed individual through credit card companies and payment services like PayPal, they report those payments to the IRS using this 1099 form.

Paypal

Here's how to receive a 1099-K from PayPal and how to use it to file and pay your 1099 taxes.

Shopify

Here's how to receive a 1099-K from Shopify and how to use it to file and pay your 1099 taxes.

Venmo

Here's how to receive a 1099-K from Venmo and how to use it to file and pay your 1099 taxes.

Who Receives a 1099-K

Find out who gets a 1099-K form and how your taxes are affected by it. Learn about the requirements, cutoff points, and typical receivers of this crucial IRS document.

Information Reported on a 1099-K

Accurate tax reporting can be ensured by learning how to use the 1099-K form and comprehending the information given. Learn about monthly transactions, payer information, and gross payments.

How to Use a 1099-K for Tax Filing

Discover how to properly report 1099-K revenue on your tax return, check amounts against your records, and claim expenses as a deduction. Avert typical errors and make sure your taxes are filed correctly.

Differences Between 1099-K and 1099-MISC

To accurately report income and prevent tax-related complications, self-employed individuals must understand the fundamental differences between 1099-K and 1099-MISC forms. Learn how to deal with income that is reported on both forms and the IRS standards for figuring out which one to use.

Common Issues with Form 1099-K

Acquire knowledge on managing differences between income that is reported and what is really received, fixing inaccurate 1099-K forms, and settling conflicts with payment processors. For self-employed people to guarantee appropriate tax reporting, this information is crucial.

Preparing for Tax Season with a 1099-K

Get tips for handling tax season by using a 1099-K. Learn how to properly arrange your documents, seek advice from a tax expert, and use tax software to ensure accurate reporting.

Filing Requirements for eBay Sellers

Learn about the necessary tax filing requirements for eBay sellers, such as IRS compliance, estimated tax payments, and deadlines. Use our professional guide to stay compliant and stay out of trouble.

Tax Implications of Selling on eBay

Recognize the state-specific tax ramifications, self-employment tax, and sales tax duties while selling on eBay. The purpose of this article is to assist independent contractors in understanding the intricacies of eBay sales tax.

eBay 1099 and Tax Planning Strategies

As an eBay seller, learn crucial tactics to reduce tax obligations, optimize tax write-offs, and handle predicted quarterly tax payments. Find out how much money to set away for taxes, and get tailored guidance from a tax expert.

Form 1099-MISC VS Form 1099-NEC

Understand what makes these 1099 forms different from each other and what they mean for you as a 1099 freelancer, independent contractor or self-employed individual.

Form 1040-ES

This vital tax form for self-employed individuals and freelancers is how they pay quarterly taxes, which they need to estimate (ES means estimated taxes).

1099 A form

The 1099-A form is received when an owned property has been foreclosed. This form is reported on Schedule D after calculating capital gain or loss.

1099 B form

A 1099-B form is an informational return form for recording the sale of investments by brokerages. This is reported on Form 8949 and Schedule D.

1099 G form

The 1099-G form is used to report payments made by governments to individuals. Unemployment compensation should be reported on Schedule 1 (Form 1040).

1099 SA form

The 1099-SA form is an informational form that reports distributions from your health plan. This is filed on Form 8889 or Form 8853 and attached to Form 1040.

1099 and Taxes: Knowing the Various Form Types

To guarantee correct tax reporting and compliance, familiarize yourself with the several kinds of 1099 forms, their functions, and the filing requirements. Find out which form you require for interest income, dividend income, miscellaneous income, non-employee remuneration, and more.

1099 and Taxes: How to Include Income from 1099s on Your Tax Return

Discover the correct way to include 1099 revenue on your tax return. Comply with a methodical procedure, recognize the need of keeping precise documentation, and learn how to reconcile 1099 revenue with personal data.

1099 and Taxes: Typical Errors with 1099 Forms to Avoid

Discover key mistakes to avoid with 1099 tax forms. Learn about accurate income reporting, correct form usage, meeting deadlines, and best record-keeping practices to ensure tax compliance and avoid penalties.

1099 and Taxes: Independent Contractor Tax Deductions

Navigate the complex tax landscape as a 1099 independent contractor with our comprehensive guide on tax deductions. Learn about QBI, meal and travel costs, home office deductions, and more to optimize your savings and reduce your tax liability.

Filing 1099 and Taxes for Gig Workers or Freelancers

Discover how to file taxes if you work as a gig worker or freelancer. Recognize self-employment taxes, submit estimated taxes on a quarterly basis, and use tax software to streamline the procedure. Learn how to keep track of and classify business spending while adhering to state tax regulations.

1099 and Taxes: Strategies for Contractor Tax Planning

Discover crucial tax planning strategies for 1099 contractors. Learn how to save for taxes, make quarterly payments, use tax-advantaged accounts, manage variable income, and more to ensure financial stability and compliance.

Managing 1099 and Taxes: What to Do with a Missing or Inaccurate Form

Become knowledgeable about managing incomplete or inaccurate 1099 paperwork as a self-employed person. Learn the ins and outs of accurately reporting income, obtaining revised forms, and preventing problems with tax returns.

1099 and Taxes: Predicted Repayments on Income from 1099s

In order to stay in compliance with IRS requirements and prevent fines, learn how to calculate and submit anticipated tax payments for 1099 revenue. Learn the value of quarterly installments and how to file your estimated taxes using Form 1040-ES.

1099 and Taxes: A Guide for Self-Employed Individuals with 1099 Income

Taking care of your taxes as a self-employed person can be a difficult undertaking. The Internal Revenue Service (IRS) defines a self-employed person as someone earning income from an independent economic activity and is responsible for collecting self-employment taxes. Knowing how to manage self-employment tax and 1099 income is one of the most important things. We will explore the complexities of self-employment tax, its computation techniques, and ways to reduce your tax liability in this post.

IRS Penalties for Not Reporting 1099 and Taxes Income

Find out how to avoid the harsh penalties associated with failing to submit 1099 income to the IRS. Learn the value of precise and timely reporting to prevent expensive errors.

Form 1040

This is the most common document in the US tax system. It's the master tax return that every American fills out.

Form 1040 Schedule C

Running a business by yourself? This is the tax return 2024 schedule where you report how much (knock on wood) profit you made or how much you (heaven forbid) lost over the course of the year.

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! It tracks all your business expenses automatically using A.I. to find every possible tax deduction. 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. Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and more money on your taxes than last year, guaranteed.
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