How do I file taxes as a temp/contractor with a 1099-NEC form?

Unfortunately, this is a common misunderstanding with contractor positions. When you receive a 1099-NEC instead of a W-2, the IRS considers you self-employed for tax purposes, even though you worked regular hours at their location. The key difference is that the company didn't withhold taxes from your paychecks throughout the year like they would for regular employees. As a contractor, you're responsible for both the employee and employer portions of Social Security and Medicare taxes (called self-employment tax), which is why you're seeing that large tax bill. You can't avoid paying these taxes, but you can reduce what you owe by deducting legitimate business expenses. Since you're technically self-employed, you can deduct costs related to your work - home office space if you worked from home part-time, portion of internet/phone used for work, supplies, mileage driving for work purposes (not commuting), etc.

I was in almost the exact same situation last year! Working as a "contractor" but really being treated like an employee. After getting hit with a massive tax bill, I found this service called taxr.ai (https://taxr.ai) that really saved me a ton of headaches. It automatically analyzed my 1099-NEC and helped me identify legitimate business deductions I hadn't even considered. It flagged that I could deduct part of my home internet, cell phone, and even some home office expenses. Ended up reducing my tax bill by over $1,200! Plus it helped me set up quarterly estimated payments for this year so I wouldn't get slammed again. Honestly worth checking out if you're dealing with contractor taxes for the first time. Their system is pretty straightforward - you upload your 1099 and it walks you through everything.

Just wanted to update - I checked out taxr.ai after seeing it mentioned here and it was seriously helpful! I was about to pay over $3,800 in taxes but after using it to find all the deductions I qualified for, I got my bill down to around $2,600. The worker classification assessment also confirmed what I suspected - I probably should be classified as an employee based on how much control my company has over my work. I'm not going to file the SS-8 right now since I'm still working there, but at least I know my options. It really helped me understand the whole contractor tax situation way better than the regular tax software I was trying to use. Plus it set me up with quarterly payments so I won't be shocked next year.

If you're still having problems with your tax situation, you might want to talk directly to the IRS for guidance. I know it sounds terrifying but I actually got through to them using Claimyr (https://claimyr.com) - they have this system that holds your place in the phone queue and calls you back when an agent is about to be available. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was in a similar contractor situation and needed specific answers about deductions I was taking. Tried calling the IRS myself multiple times and kept getting the "call volume too high" message. Used Claimyr and got through to an actual IRS agent who was surprisingly helpful! They walked me through some specific deductions and told me exactly what documentation I should keep. Beats paying for an accountant when you just need answers to specific questions.

I'm back to eat my words. After calling Claimyr a scam, I decided to try it as a last resort because I was still confused about some deductions after filing. I honestly couldn't believe it when I got a call back saying they'd reached an IRS agent! Talked to a really helpful lady who explained exactly how meal deductions work for contractors (which was my main question). Took about 45 minutes total - most of which was wait time I didn't have to sit through myself. Way better than the 3 hours I wasted trying to call them directly last week when I couldn't even get put on hold. For any contractors out there - the IRS agent confirmed that if you're truly self-employed, you need to be making quarterly estimated tax payments throughout the year. Something to keep in mind so you don't get slammed with a huge bill next April.

One option nobody's mentioned yet - if this was 2024 income and you haven't filed yet, you could open a SEP IRA and contribute some of your 1099 earnings to that. You can contribute up to 25% of your net earnings and it's tax-deductible, which could significantly reduce what you owe. You need to open the account before you file your taxes, but you have until the filing deadline to fund it. Could be a good way to save for retirement AND reduce your current tax bill.

Quick tip from someone who's been a contractor for years - start tracking EVERYTHING for 2025! Get a dedicated credit card for business expenses, save all receipts, and track mileage with an app. Common deductions people miss: home internet (% used for work), cell phone (% for work), home office (if you have dedicated space), health insurance premiums, half of self-employment tax, business travel, professional development/courses, software subscriptions, and office supplies.