If you are self-employed or run a side hustle, you must file Form 1099. It is an important tax document that details any earnings you receive outside of the salary paid by an employer. You’ll also need to calculate your 1099 taxes, and a 1099 tax calculator is just the tool you need for this. We’ll break down how to use the calculator and maximize your tax savings.

Key takeaways:

Freelancers and self-employed individuals pay taxes on 1099 income
There are several types of 1099 forms to report different kinds of income
1099 forms are used to file income taxes at the end of the year
A 1099 taxes calculator is a useful tool for independent contractors

Most Asked Questions to a FlyFin CPA

Is all 1099 income subject to self-employment tax?

Not all 1099 income is subject to self-employment tax. Whether you owe self-employment taxes or not depends on the nature of your income and whether you meet other eligibility criteria.

How does a 1099 employee pay taxes after deducting internet costs?

1099 contractors using the internet for business purposes can deduct a portion of internet expenses as a business write-off on Schedule C. This will lower your taxable income and can lower your tax amount.

Does property tax affect my 1099-NEC tax rate?

You can deduct property tax in the year it is paid, as long as you itemize your deductions. 1099 employees can do this and still itemize their business expenses as property taxes only affect federal income tax.

Can I write-off an IRA contribution as a 1099 tax deduction?

You can take 100% of traditional IRA contributions as a self-employed tax deduction if you (or your spouse) are not part of any other retirement plans.

Are GoFundMe donations tax-deductible?

GoFundMe donations may be written off 1099 employee tax if they are made to qualified charitable organizations recognized by the IRS. However, not all campaigns on GoFundMe qualify, so it's important you verify the eligibility of the donor.

Can I use a business write-off calculator to deduct donations?

Yes, tax calculators can find deductible charitable contributions made to qualifying organizations. You can deduct charity donations even if you donate physical items rather than money. Taxpayers can claim this expense if they itemize their deductions on Schedule A.

Are benefits a self-employed tax deduction?

Certain employee benefits may be tax-deductible only for W-2 employees. Self-employed individuals cannot deduct benefits from their 1099 employee tax.

What expenses can I deduct from a business trip?

Paying taxes as a 1099 employee means you can deduct common expenses for a business trip like transportation, lodging, meals, and certain incidental expenses directly related to your business activities. Make sure you keep your receipts when you claim this deduction.

What taxes does a 1099 employee pay working as Uber and Doordash drivers?

Uber and Doordash drivers have to pay SECA tax and federal and state income taxes, if necessary. They may be eligible to deduct various business-related expenses, including mileage, vehicle maintenance, phone and internet costs, and parking fees to lower their 1099 employee tax.

How to figure out self-employment tax with medical expenses?

There are many medical deductions that 1099 employees can deduct to lower their taxes. The IRS has a more detailed list on their website.

Can I deduct gifts to family from my 1099 taxes?

Generally, gifts to family or individuals are not tax-deductible so it will not affect your 1099 income tax rate.

Is all 1099 income subject to self-employment tax?

Not all 1099 income is subject to self-employment tax. Whether you owe self-employment taxes or not depends on the nature of your income and whether you meet other eligibility criteria.

How does a 1099 employee pay taxes after deducting internet costs?

Does property tax affect my 1099-NEC tax rate?

Can I write-off an IRA contribution as a 1099 tax deduction?

You can take 100% of traditional IRA contributions as a self-employed tax deduction if you (or your spouse) are not part of any other retirement plans.

Table of contents

Form 1099 vs Form W-2...Read more

What is a 1099 employee?...Read more

📝 Types of 1099 Forms...Read more

Purpose of Form 1099...Read more

Self-employment tax...Read more

Self-employment tax rate...Read more

💸 Quarterly taxes...Read more

How to pay 1099 taxes?...Read more

1099 tax savings...Read more

Form 1099 vs Form W-2

According to the IRS, any self-employed individual who works as an independent contractor or a freelancer is considered a 1099 employee. A 1099 form is entirely different from a W-2 form. If your employer or client sends you a self-employed 1099 form, it’s a sign that they see you as an independent contractor rather than an employee. W-2 employees have taxes withheld when they get paid. However, freelancers or 1099 self-employed individuals have to figure out what they owe in taxes to their state and federal government, just like a small business would. If you work for a company that issues you a paycheck for wages or salary regularly, you won't be receiving a 1099 from your employer, and your employer will withhold some of your pay for taxes. But if you work for yourself, and the company or companies that pay you for your work send you 1099 forms, you'll need to figure out what you owe and pay your own taxes.

Filing 1099 taxes involves several key steps, and having a clear roadmap can make the process much smoother. Below is a step-by-step checklist with helpful resources to guide you through each stage of filing your taxes.

Steps to File 1099 Taxes

Gather 1099 Forms

Action Items & Resources

Ensure you’ve received all 1099 forms from clients and companies you worked with. FlyFin CPA team will provide you with a list of required forms to upload for your tax filing. This ensures nothing important is missed out.

Learn More: Guide to IRS Form 1099

Calculate Your 1099 Income

Identify Deductions

Estimate Tax Liability

File Your 1099 Taxes

Action Items & Resources

Once you have submitted the necessary forms, the CPA team will review them to carry out the e-filing income tax process and prepare your tax return. This ensures your taxes are filed accurately and efficiently, saving you time and minimizing the risk of errors.

Learn More: Guide to IRS Form 1099

Infographic entitled 1099 and W-2: Key Differences describing different forms needed to use the 1099 taxes calculator

Small businesses hire accountants, bookkeepers and CPAs to handle their accounts and taxes. That’s what the IRS expects from you if you have any self-employed income. But you don’t have to figure out your taxes all on your own. A tax calculator for independent contractors is just the tool you’ll need. You should expect to receive a 1099 form in January. If you don’t receive one, it may have gotten lost in the mail or they might have sent it to the wrong address. You can always reach out to them and request a new one. Whether you have the 1099 in hand or not, you still need to report this income on your tax return.

What is a 1099 employee?

A 1099 employee is someone who works as an independent contractor or freelancer and contracts their services to clients. Simply put, someone who receives 1099 income is typically a 1099 employee. Every 1099 employee needs to pay 1099 taxes on their income since the taxes aren’t withheld. This is where a 1099 tax calculator comes in handy to find your correct tax amount. Some examples of 1099 employees include:

An architect who creates blueprints for a company and is on the project for a set amount of time.
A freelance editor who edits magazines on a per-assignment basis
A plumber contracted to fix the plumbing in an office building
An Airbnb host that rents out multiple properties to guests

📝 Types of 1099 Forms

There are multiple self-employed 1099 forms available, and each is used to report different sources of income. You don’t need every type of 1099 form to use a 1099 taxes calculator, but it’s good to know what each form is used for. Some common types of 1099 forms include: 1099-NEC: Form 1099-NEC (Non-employee Compensation) is meant for freelancers or independent contractors. The form details the income received for services you performed for someone who isn’t your employer. Use a 1099 NEC tax calculator to help figure out your taxes. 1099-INT: for reporting any interest income of at least $10 received during the year. 1099-DIV: for reporting dividend income from a stock or mutual fund. 1099-G: for reporting any government payments, like unemployment benefits. 1099-MISC: for reporting miscellaneous income, like rent award-winnings or legal settlements. 1099-K: for reporting any payments received via credit card or a third-party transaction platform (like Paypal). The 1099-K tax rate is $600 or more in business transactions. 1099-R: Use this form to report any payments you received from retirement plans, pensions, IRAs, annuities, and profit-sharing programs.

Understanding the right 1099 form to use can save time and avoid confusion. Based on your income sources, the following table will suggest the most appropriate 1099 form for your needs, ensuring you're on the right track to file accurately.

Income Source

Type of 1099 Form Required

Income from Gig Work Platform

1099-NEC (Nonemployee Compensation)

Prizes or Awards Received from Competitions

1099-MISC (Miscellaneous Income)

Earnings from YouTube Ad Revenue

1099-K (Payment Card and Third-Party Network Transactions)

Gains from Cryptocurrency Mining

1099-B (Proceeds from Broker and Barter Exchange Transactions)

Interest Earned from Savings Accounts

1099-INT (Interest Income)

Pandemic Unemployment Assistance

1099-G (Certain Government Payments)

Mutual Fund Dividends

1099-DIV (Dividends and Distributions)

Purpose of Form 1099

A 1099 form is an informational tax form that documents the income you receive from a client. This income must be included on your tax return. For example, if you took on a design gig as a side hustle, making menus for a new restaurant and got paid, your client will send you Form 1099-NEC if you made over $600. You should then use a 1099 income tax calculator to calculate your taxable income. The form is important to help you file your income tax return. So if you receive it, you must check it for accuracy. Verify if the following information has been correctly added to the form:

Your correct personal information: name, address, Social Security number
The amount of income reporting

If anything seems inaccurate, you must contact your client as soon as possible and get your information corrected. If you have a landscaping company, and did some work on the grounds of a business's headquarters, the company would send you a 1099. If the amount they paid you is listed on the form as more than they actually paid you, according to your bank records, this is a problem. This form also gets sent to the IRS to report your income, and if the IRS sees that you were paid more than you actually were, they will expect you to pay more in taxes than you actually owe. That's why you need to contact the company to issue you and the IRS a new, accurate 1099 form as soon as possible. If your information seems accurate, keep a copy of your Form 1099 to file your income tax return. Based on the type of form you receive, the income will be reported on your tax return in different places, and you will receive your income tax refund. For example, income on a 1099-NEC will be reported on your Schedule C, Profit or Loss from the business. Income on a 1099-INT will be reported on the first page of your tax return, Form 1040 . FlyFin’s free tax calculator makes calculating your self-employment income tax liability easy. It can offer a simple solution for calculating taxes for 1099 employees.

Self-employment tax

Self-employment tax consists of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. Schedule SE is where you will figure out your self-employment tax, or you can simply use the self-employed tax calculator. If you are an independent contractor, you are considered to be self-employed. This means that your earnings are subject to the self-employment tax. The good news is that as a self-employed worker, you can lower your taxes by claiming tax deductions. FlyFin's A.I. finds every possible tax deduction in your expenses on an ongoing basis, so you're ready as soon as taxes are due. It can also help with calculating your 1099 taxes.

Self-employment tax rate

The self-employment tax rate is 15.3% of your net earnings. The Social Security and Medicare taxes that make-up self-employment taxes have different rates. Social Security covers 12.4% and Medicare makes up the remaining 2.9%.

💸 Quarterly taxes

As a freelancer, you must make quarterly tax payments if you owe $1,000 or more in taxes when you file your annual return. It’s the same case with corporations that expect to owe at least $500 to the government. One way to know what you owe is to look at last year's tax return. Did you end up paying more than $1,000 in income tax working? Then you'll need to pay quarterly taxes this year. Under certain circumstances, you may not have to pay estimated taxes if you meet the following conditions:

You had no tax liability during the previous year
Your last tax return covered a whole year (12 months)
You were a US citizen for the entire year

As a freelancer, you need to calculate your 1099 quarterly taxes using the IRS’ Estimated Tax Worksheet found within Form 1040-ES. You can also use a Quarterly Tax Calculator. Failing to pay quarterly taxes can result in a penalty. A Tax Penalty Calculator can help your calculate your 1099 tax penalties.

Tax Tip of the Week :

If you didn’t owe taxes last year and meet the IRS criteria, you may not need to make estimated tax payments this year. Review the requirements carefully.

How to pay 1099 taxes?

The first step is calculating your quarterly tax payments. Once you know how much you’ll owe, you’re ready to make the payment. When it comes time to file your Form 1040, there are a few ways to do this. You can:

Pay using IRS paper forms
Submit them online on the Electronic Federal Tax Payment System
Attach any overdue payments to your annual tax return

Infographic entitled Steps For Paying Taxes as a 1099 Employee showing the process of paying 1099 taxes.

When you're self-employed, taxes are paid four times a year instead of all at once. That’s a lot of deadlines to keep track of! Following the IRS deadlines is key to avoiding a late filing penalty. If you want some help remembering the deadlines, FlyFin can send you reminders so you’ll never miss a payment.

Infographic entitled 2024 Quarterly Tax Dates showing the dates to pay 1099 taxes for the 2024 tax year.

1099 tax savings

We’re all looking for ways to save on taxings, and one way to do this is by taking advantage of tax credits. Tax credits are a dollar-for-dollar reduction on your income taxes. If you have children, for example, the government provides credits to help support your family. The dependent care credit helps offset the cost of childcare. Or, if you pay higher education expenses, like for a college or university, you might qualify for the education tax credit. You might qualify for the electric vehicle tax credit if you purchased an electric car this year. There’s even a tax credit available for low-to-moderate-income workers to help reduce the taxes owed called the earned income credit. If you meet the criteria set by the IRS, you can help lower your tax bill and score tax savings. Another great way to save on taxes is by writing off your business expenses as 1099 tax deductions. Any ordinary or necessary expense in your industry can be written off. The more tax deductions you have, the lower your taxes. Some of the most common self-employed tax deductions are:

Home office
Work uniforms
Bank and credit card fees
Software subscriptions
Internet and phone bills
Advertising costs

To make the most of your tax savings, it's crucial to know which deductions apply to you as a 1099 employee. Explore a detailed breakdown of deductible expenses across key categories such as Personal Vehicle Deductions, Travel Deductions, and Utility Deductions to ensure you're not leaving any money on the table.

Top Deductions for 1099 Employees

Infographic entitled Utility Deductions showcasing deductible expenses under the utility category for 1099 taxpayers.

Landline bill

Phone bill

Electricity bill

Landline bill

Phone bill

Electricity bill

Infographic entitled Personal Vehicle Deductions highlighting key vehicle-related deductions for self-employed individuals.

Car insurance

Bike & accessories

Seat cover

Car insurance

Bike & accessories

Seat cover

Infographic entitled Travel Deductions outlining eligible tax deductions under the travel category for 1099 employees.

Travel meals

Transportation Services

Travel lodging

Travel meals

Transportation Services

Travel lodging

Landline bill

Phone bill

Electricity bill

Landline bill

Phone bill

Electricity bill

Car insurance

Bike & accessories

Seat cover

Car insurance

Bike & accessories

Seat cover

It’s best to use a tax tool, like a 1099 deduction calculator, to ensure you get accurate tax calculations. With FlyFin, you’ll never have to worry about 1099 taxes. AI automatically finds every possible self-employed tax deduction you can take, making sure you keep your tax bill as low as possible.

Different professions often have unique expenses that qualify as deductions. By understanding the specific tax deductions available for your line of work, you can maximize your savings. Let’s explore the key tax deductions for professions such as Uber Drivers, Real Estate Agent, and Artist.

Top Deductions for Professions

Infographic entitled Maximize Your Tax Savings: Deductions for Artist displaying essential business expenses eligible for tax deductions.

Infographic entitled Top Deductions for Uber Driver highlighting major tax deductions available for 1099 employees in this field to reduce taxable income.

Infographic entitled Key Tax Write-Offs for Real Estate Agent showcasing common deductible expenses for 1099 taxpayers to help maximize savings.

Expert CPAs provide unlimited tax support on the app and can answer questions like how much do I owe in taxes, how to calculate 1099 taxes and how to write off business expenses. They can also prepare and file your returns.

Content Reviewed By

FlyFin CPA Team

With a combined 150 years of experience, FlyFin's CPA tax team includes tax CPAs, IRS Enrolled Agents and other tax professionals, offering users the most comprehensive tax advice and preparation.

Frequently asked questions

FAQs

What is the 1099 tax rate?

How much tax do I pay on 1099 income?

How do I file 1099 taxes?

Why do employers prefer 1099?

Is 1099 self-employed?

How do I claim these self-employment tax deductions?

Can you get a 1099 and a W-2?

How much taxes will I pay on a 1099?

Do 1099 employees pay more taxes?

Is everything on a 1099 taxable?

Here's what other freelancers have to say

What’s FlyFin?

FlyFin caters to the tax needs of gig workers, freelancers, independent contractors and sole proprietors. This tax tool is especially helpful for gig workers, who don't have tax support from an employer like W-2 employees do. FlyFin tracks all your business expenses using A.I. to find every possible tax deduction. You can also consult our expert CPA team to file a guaranteed 100% accurate tax return. It saves you a couple of thousand dollars and a ton of time on your taxes. Download the FlyFin app and have your 1099 taxes filed in less than fifteen minutes, saving you time and more money on your taxes than last year, guaranteed.