Another option not mentioned here - sometimes you can negotiate with the content creator for cash instead of the actual car, which can be enough to cover a more affordable vehicle PLUS the taxes. My cousin won a Tesla from a big YouTuber last year and worked out a deal to take $35k cash instead of the $60k car. Bought a used Accord and had enough left to cover the taxes and put some aside. Worth asking!

For anyone in this situation, remember you can make quarterly estimated tax payments to avoid a huge bill (and potential penalties) at tax time. When my daughter won a car from a streamer giveaway, we calculated the approximate tax and made payments throughout the year. Form 1040-ES is what you need.

2 This happened to me too! Ended up just ignoring the forms since I had no employees and didn't get any follow-up notices from the IRS. That was 3 years ago. Probably not the most responsible approach but worked out fine for me lol.

I'm dealing with this exact same situation right now! Got my EIN a few months ago and checked the box saying I might hire employees, but my freelance business isn't at that point yet. The IRS sent me the same 940/944 notices and I've been stressed about it. Based on all the advice here, it sounds like the key is updating your information with the IRS rather than just ignoring it or filing zero returns. I'm going to try that Claimyr service since I've had zero luck getting through their phone lines myself. Thanks everyone for sharing your experiences - this thread has been way more helpful than anything I could find on the IRS website!

Don't forget about setting up a backdoor Roth IRA too if you're looking to maximize retirement savings! Since you're already maxing out your regular 401k employee contributions and looking at employer contributions from your 1099 income, you might as well take advantage of the Roth option too.

Just wanted to add another perspective based on my experience. I was in almost the exact same situation - W-2 job where I maxed out the $23,000 employee contribution plus irregular 1099 consulting income. I ended up going with Fidelity for my Solo 401(k) because they had zero account fees and a really straightforward application process. The key thing I learned is that you need to establish the Solo 401(k) by December 31st of the tax year, but you can fund it all the way up until your tax filing deadline (including extensions). This timing flexibility was huge for me since my consulting income is so unpredictable. I basically wait until January/February when I'm doing my taxes to see exactly what my net self-employment income was, then calculate the maximum employer contribution (around 20% of net profit after the self-employment tax adjustment) and make one lump contribution. For your income range, you're looking at potentially $11k-$22k in additional tax-deferred savings annually, which is substantial. The setup took me about 30 minutes online, and now it's just part of my annual tax routine. One tip: keep really good records of your business expenses throughout the year since those directly impact your net profit and therefore your maximum contribution amount.

One thing to consider that hasn't been mentioned is your business expenses. Are you actually netting $54k, or is that your gross income? If it's gross, then you need to subtract all your legitimate business expenses before calculating any taxes. Common deductions for self-employed people: - Home office (if used regularly and exclusively for business) - Business portion of internet and phone - Mileage for business trips (58.5 cents per mile in 2024) - Software, equipment, supplies - Professional development and subscriptions - Health insurance premiums - Retirement plan contributions These can significantly reduce your taxable income. I thought I made about $65k last year but after properly tracking expenses, my taxable business income was closer to $48k.

As someone who went through this exact panic last year, I feel your pain! The good news is you're definitely overthinking the numbers. The other commenters have given you solid advice about the self-employment tax calculation and deductions. One thing I'd add - don't forget about business expenses that are specific to photography. You can deduct: - Camera equipment and lens purchases/repairs - Photography software subscriptions (Lightroom, Photoshop, etc.) - Props, backdrops, lighting equipment - Travel to shoot locations - Client meetings (including meals at 50%) - Photography workshops and education - Website hosting and domain costs - Business cards and marketing materials I was shocked at how much my taxable income dropped once I properly tracked all my photography-related expenses. Also, definitely look into that QBI deduction - it's a game changer for self-employed folks. The 25-30% rule for setting aside taxes is spot on. I learned that lesson the hard way! Consider opening a separate savings account just for taxes so you're not tempted to spend that money.

Has anyone considered just using the per-mile deduction rate instead? It's so much simpler and the IRS specifically says it covers all costs including fuel, which would include electricity for charging. I switched to this method for my business EV last year and it's been WAY easier than tracking actual expenses.

I'm dealing with the exact same situation! Just got my EV last month and have been wondering about this. After reading through everyone's responses, I think I'm leaning toward the standard mileage deduction for simplicity, but I'm curious - for those who have done the actual expense method, what percentage of your total electric bill typically ends up being business-related EV charging? I'm trying to get a rough sense of whether it's worth the extra tracking effort or if the standard mileage rate would likely be comparable anyway. My business driving is probably around 60% of my total miles, but I have no idea if that translates proportionally to electricity costs since I also heat/cool my house, run appliances, etc.