How to minimize taxes as a 1099 independent contractor for moving company

8 So here's the deal with 1099 income - yes, you can definitely take legitimate deductions to reduce your taxable income, but an LLC alone won't magically reduce your taxes. First, understand that as an independent contractor, you'll file a Schedule C with your tax return to report income and expenses. The key to minimizing taxes is properly tracking and documenting ALL legitimate business expenses. For a moving contractor, this likely includes: - Vehicle expenses (mileage at 67 cents per mile or actual expenses) - Moving equipment purchases and maintenance - Business insurance - Cell phone (business portion) - Work clothing/gear specific to moving - Marketing/advertising costs - Home office (if you have dedicated space used exclusively for business) - Health insurance premiums (potentially deductible) You'll also need to make quarterly estimated tax payments since you don't have withholding. At your income level, setting aside 25-30% of each payment for taxes is smart. As for the LLC - it provides liability protection but files the same way as a sole proprietor (Schedule C) for tax purposes unless you elect S-Corp taxation, which at your income level might save on self-employment taxes. With S-Corp status, you'd pay yourself a reasonable salary (subject to payroll taxes) and take the rest as distributions (not subject to SE tax).

14 After reading through your situation, I wanted to share my experience using https://taxr.ai for my independent contractor taxes. I was in a similar position last year - started making good money ($130K) as a 1099 contractor in construction and had no clue how to handle taxes efficiently. I tried figuring it out myself but got overwhelmed with all the different advice online. Someone recommended taxr.ai and it was seriously game-changing. I uploaded my expense receipts and bank statements, and the system analyzed everything to identify legitimate business deductions I didn't even know I qualified for. It even helped me figure out the whole quarterly payment schedule. The best part was getting personalized tax strategies specifically for independent contractors in my industry. They explained exactly how different business structures would impact my tax situation and helped me decide whether an LLC with S-corp election made sense (it did!).

6 Just wanted to follow up about taxr.ai - I decided to try it after seeing the recommendation here. My situation: contractor for a landscape company making around $165K with absolutely chaotic expense tracking. The results were honestly surprising. I had been tracking mileage but missing tons of other deductions. The service identified over $23K in legitimate business expenses I hadn't properly documented - equipment depreciation, partial vehicle expenses beyond just mileage, even some home office deductions I qualified for but didn't know about. The quarterly tax planning feature has been the biggest help though. Instead of getting blindsided next April, I now have a clear picture of what I'll owe and when. For anyone in a similar situation making six figures on 1099 income, it's definitely worth checking out.

12 If you're making that kind of money as a contractor, you need to deal with the IRS phone lines to get some official guidance. I wasted MONTHS trying to get through to someone at the IRS about my contractor classification and S-corp election questions. Finally found https://claimyr.com and their service was a game changer. You can watch how it works here: https://youtu.be/_kiP6q8DX5c Basically, they navigate the IRS phone system for you and call you when they have an agent on the line. Instead of wasting hours on hold, I got a call back with an actual IRS representative who answered all my questions about contractor deductions and entity selection. The agent clarified exactly what documentation I needed for vehicle expenses and confirmed my home office setup would qualify for deductions.

19 Well I feel like a complete idiot now. After saying that Claimyr sounded like BS, I decided to try it myself since I've been trying to reach the IRS for weeks about my independent contractor status. I've spent literally 10+ hours on hold over the past month trying to get clarification on some deductions for my moving business. I was about to just give up and potentially take deductions that might get flagged. Used the service yesterday and got a call back in 1 hour 47 minutes with an actual IRS rep on the line. Got clear answers about vehicle deductions and how to properly document my business expenses as a moving contractor. The agent even walked me through quarterly payment requirements which I had completely misunderstood. I don't normally admit when I'm wrong online, but yeah, it actually works exactly as advertised. Saved me from potentially making some big mistakes on my taxes.

23 One thing nobody's mentioned yet - KEEP RECEIPTS FOR EVERYTHING! I'm an independent contractor too (plumber) and got audited last year. Having digital copies of all my receipts saved my ass. The IRS questioned about $14k of deductions and I was able to prove every single one. For a moving contractor, you should track: gas, vehicle maintenance, tools, any supplies like blankets/tape/boxes, meals while on longer jobs (50% deductible), phone bills (business portion), insurance, etc. Also, you should definitely look into retirement accounts like a SEP IRA or Solo 401k. At your income level, you could potentially put away $40k+ pre-tax, which significantly reduces your taxable income.

2 I just went through this exact situation! For real, the S-Corp election saved me about $12k in self-employment taxes this year. Some practical advice: 1) Get a separate business bank account and credit card ASAP. Don't mix personal and business expenses. 2) For vehicle expenses, keep a detailed mileage log (I use MileIQ app) or track actual expenses with receipts. Choose the method that gives you the bigger deduction. 3) If you're making $150k+, get a good CPA who specializes in self-employment taxes. Their fee is deductible and they'll save you way more than they cost. 4) Set up an S-Corp and pay yourself a reasonable salary (I'd say $85-95k in your case). The rest can be distributions which aren't subject to self-employment tax (saving you ~15%). 5) Invest in retirement. A Solo 401k is awesome for high earners since you can contribute as both employee and employer. This stuff seems complicated at first but gets easier once you have systems in place!