So you are getting ready to file your taxes and of course, you are terrified of what the outcome will be. It is truly sad that year after year we put ourselves in such a guessing game with taxes when all one really has to do is stay organized a little each day, rather than a lot in 3 days before the deadline! But hey, we all procrastinate to get a tax write off. Anyways 1099 who gets them?
Right now your largest concern is probably what items you are able to list as write-offs. Believe it or not, many people actually miss legitimate write-offs, it happens all the time. We just assume that if anything, we are towing the line with what we have, creating risk. But the fact is, that’s not the case typically. Typically we are too conservative and often times that’s a direct result of being uninformed (which can also be a result of being rushed).
So what can you write off from your 1099? Look at a few obvious items to start.
Travel: If you drive around servicing clients, this is a good place to look into. There are fuel cost and miles which can be written off appropriately. Travel also includes air travel, plane tickets, checked bag fees, and some food at the airport. Did you buy a laptop bag? Think about it, there are tons of travel-related cost you probably never considered.
Your Rent / Mortgage: So you work at home you say? How much space do you use inside your house for a work-related space? What about furniture? Did you buy a printer or a fax machine? Come on man, you gotta a lot going on in this department!
Your Phone: Do you text clients, do customers call your cell, do your research using your phone’s data plan? This is an often missed write off that can consequently cost those who forget to use it where applicable.
Charity: Did you donate some clothes or furniture to Good Will? Keep those receipts my friends! They can come in handy during tax season! Just like our tax form processing services. Remember your tax write off!
Don’t miss obvious tax write-offs, its just unnecessary pain!
Being a retiree is a hard life. You probably travel. You probably avoid winter by living in South Florida. You probably eat grapefruit, drink fine wines and watch sunsets. You spoil grandchildren. You enjoy hearty buffets. I mean, maybe you don’t, but I kind of hope that you do. Because that’s the awesome way to live life after 60. I mean, I’d like to enjoy my life like that right now. Ah….one day, right?
Being a retiree, as great as it may be, doesn’t eliminate one from filing taxes and dealing with a 1099 or W2 in some cases. That’s life, taxes are always a part of the experience and something every retiree will have to deal with at some point. The key is knowing the ins and outs and not making poor decisions when as either a retiree or someone merely saving for retirement (huge mistakes which could easily be avoided are often made).
401k. Be careful here, don’t just withdrawal cash from your 401k without first consulting a qualified accountant. 401k’s are highly taxed investment once you pull them out and they can lead to some very bad tax situations. A great many people don’t realize this, even if you have the 401k holder withhold taxes, almost like a company holds taxes from a check, you are still subject to penalties.
Roth 401k. Your contributions don’t give you any benefit in the tax year but feel free to pull cash from them without experiencing penalties and whatnot.
Pay attention to the minimum distributions of both IRAs and 401ks. After age 70.5, you must withdrawal minimum distributions which is balanced on life expectancies.
If you are working, don’t pull from your 401k. Not wise. In fact, hold off withdrawing from any retirement account at all. Be smart! Don’t fall into any tax traps!
The big scary tax season is upon us. Even with a mammoth monstrous epic blizzard hitting the Northeast this evening, many of us are more concerned with the tax storm which arrives on April 15th. And rightfully so, taxes, though a yearly thing every one of us has to partake in, are a very confusing matter for many of us. What can we write off? Well, let’s look at a few good solid tax write-offs to complete your blank 1099.
Independent contractor meals deduction
Meals served to independent contractor participants are subject to the 50% cut that applies to meals and entertainment.1 Thus, if you have 100 contractors, your deduction for the $50,000 in meals will be only $25,000.
So put the cost of the meals on 1099 for each independent contractor. This way, you deduct 100% of your $50,000 as compensation and stick the contractors with the 50% problem. (Someone is going to get stuck with the 50%—it’s either you or them. And besides, you paid their room and board for four days!) Love my tax write off!
Did you move for work or business?
Moving for work can incur a ton of expenses, many of which can be written off. Hotels, gas, and food to some degree.
Did you travel for work or business?
Do you travel for business without reimbursements? This is a great write off example.
Did you have any ongoing memberships to online education sites that involve your career? Many online sources now charge for education, if you partook in one, say, to learn Excel or to learn HTML, you can probably write this expense off. If this is a subject that you deal with every day at work, or maybe even a part of a new endeavor or business, then you should be writing it off. Education is a part of the process in growing as an employee or business owner.
Did you buy any domains or pay for hosting? Godaddy is a great example, did you buy your own name to put up your resume on? Or did you come up with a cool idea and grab a domain? Did you also pick up hosting as an add-on? These are typical items you can write off. A domain and hosting is the needed infrastructure for any business or professional presence.
At the end of the day, you should always check with your accountant before writing anything off, or research the expense to verify its the right move for you using this 1099 tax write off the list. Usually, even your fees paid to your 1099 service provider are tax deductible.
Resources:
How to avoid paying taxes as an independent contractor
1099 form printable free easy
1099 guidelines for business
Guess what our tax form processing services can also be a write-off for your business.
