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7 Quick tip from someone who's been filing with 1099 income for years: track EVERYTHING. Mileage to meet clients, internet bills, office supplies, software subscriptions, professional development courses, etc. I use a separate credit card for all business expenses to make it easier at tax time. And don't forget about quarterly estimated tax payments! The IRS expects you to pay taxes throughout the year when you're self-employed, not just at filing time. I learned this the hard way my first year and got hit with penalties.
16 Do you have a recommendation for tracking mileage? I sometimes drive to client sites and I'm terrible at remembering to log it.
7 I use MileIQ for tracking mileage - it runs in the background on your phone and automatically detects drives. You just swipe left for personal trips and right for business trips. Super easy and creates IRS-compliant records. For quarterly taxes, I set aside 30% of every payment I receive into a separate savings account. That usually covers both federal and state taxes, plus the self-employment tax. Then I make payments online through the IRS Direct Pay system every quarter.
2 One important thing nobody's mentioned yet - if you're making decent money on your 1099 work, consider setting up a Solo 401(k) or SEP IRA. You can contribute WAY more than regular employees can to a standard 401(k), which can significantly reduce your taxable income. I put about 20% of my 1099 income into my Solo 401(k) last year and it saved me thousands in taxes while building my retirement. You can open one at most major brokerages like Fidelity or Vanguard pretty easily.
11 This is great advice! Does the Solo 401k have the same contribution limits as a regular 401k? And can I still contribute to my Roth IRA too?
Don't forget there's a special rule for "self-rentals" too! If you own a business AND rent property to that same business, different rules apply for QBI purposes. That rental income typically qualifies for QBI regardless of whether it meets the trade/business standard, as long as there's common ownership. Also, if your income is under the threshold ($170,050 for singles or $340,100 for married filing jointly for 2025), you don't have to worry about whether your rental is a specified service business or not.
Ooh, that's interesting about self-rentals. What about if I own a single-member LLC that owns both my business and a building, and the business operates in that building? Would that qualify as self-rental for QBI purposes?
For self-rentals and QBI, the key is having common ownership between the rental activity and the operating business, not necessarily the exact same entity. If your single-member LLC owns both the business operations and the building, it's actually simpler - it's all within one entity so there's no "rental" happening for tax purposes. The self-rental rule typically applies when you have separate entities or activities - like if you personally owned the building and rented it to your LLC business. In that case, the rental income would generally qualify for QBI regardless of whether the rental itself meets the trade or business standard.
Question for anyone who knows - does a triple net lease (NNN) where the tenant pays all expenses and I basically just collect a check each month automatically disqualify me from QBI? I have two commercial properties with NNN leases and trying to figure out if I should even bother trying to claim QBI on them.
Triple net leases are specifically mentioned in IRS guidance as potentially problematic for QBI. In Rev. Proc. 2019-38, they explicitly excluded triple net leases from the safe harbor. But that doesn't automatically disqualify you from claiming QBI - it just means you can't use the safe harbor provision.
Thanks for clarifying that! So I'd need to prove my triple net lease activities constitute a trade/business outside of the safe harbor? Sounds like an uphill battle given how passive those arrangements are by design. I might need to talk to my accountant about this one.
just wondering if anyone knows if we non-residents with SSNs have different filing deadlines? or is it still april 15 like everyone else?
One important thing to remember is that as a non-resident with 1099-NEC income, you might be subject to different self-employment tax rules depending on whether your country has a totalization agreement with the US. This can significantly impact how much you owe, so make sure whatever software you use addresses this!
I had no idea about totalization agreements! I'm from Brazil - do you know if that would apply to me?
Brazil currently doesn't have a totalization agreement with the US, so you would generally be subject to US self-employment taxes (Social Security and Medicare) on your 1099-NEC income. This is in addition to income tax. This is actually one of the trickier parts of filing as a non-resident with self-employment income, and why using specialized software can be worth the cost. The self-employment tax is roughly 15.3% on top of regular income tax, so it's a significant amount! Make sure whatever filing method you choose correctly calculates this for your 1099-NEC income.
I've been playing the "perfect return" game for years! My best year was getting to $3 refund. For accelerated depreciation, make sure you're keeping good records. I got audited two years ago and they specifically looked at my bonus depreciation claims. Had all my documentation and passed with no changes, but it was stressful!
You're playing on expert mode lol! I'm happy if I can just avoid owing a penalty. Quick tip though - I learned that if you owe less than $1,000 at tax time, there's no underpayment penalty. So aiming for a small amount due (like $500) is actually optimal from a cash flow perspective. You get use of your money all year AND avoid penalties.
Grant Vikers
Another option nobody's mentioned yet - you could file Form 8889 separately or with an additional statement explaining the correct calculation. I had a similar issue with TaxSlayer miscalculating my HSA contribution limits last year. I ended up printing out Form 8889, calculating the correct amounts manually, and attaching a statement explaining the discrepancy. The IRS processed it without any issues. Just make sure you write "SEE ATTACHED STATEMENT" on the form where the software calculation is wrong.
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Angelina Farar
ā¢Would doing it that way cause any problems with e-filing? I'd really prefer not to mail in a paper return if possible. Does OLT allow you to attach explanatory statements to e-filed returns?
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Grant Vikers
ā¢You're right to be concerned about e-filing. Most software doesn't allow attaching explanatory statements to e-filed returns in the same way you can with paper returns. Your best option with OLT would be to use their "Additional Information" or "Miscellaneous Notes" section if they have one. Enter a detailed explanation there about your HSA contribution calculation, specifically mentioning the catch-up amounts and why they're correct. This gets transmitted with your e-filed return. If OLT doesn't provide that option, you might need to either paper file or use different software that handles HSA catch-up contributions correctly.
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Giovanni Martello
Has anyone tried just splitting the HSA contributions differently between spouses in OLT to get around this? Like instead of $4,250 and $900, maybe try entering it as $3,150 to the family HSA and $2,000 to the individual HSAs ($1,000 each)? OLT might be applying the catch-up contributions incorrectly when they're part of the family contribution, but might handle them correctly when entered as individual contributions.
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Savannah Weiner
ā¢This actually worked for me with FreeTaxUSA! I had a similar HSA calculation issue and redistributing the contributions fixed it. Just make sure the actual contributions match what you're reporting - you might need to make adjustments with your HSA provider if the real-world contributions were different.
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