How to properly file taxes with both W-2 and 1099-NEC Forms for 2025

You'll need both Schedule C and Schedule SE for your 1099-NEC income. Here's a simple breakdown: For your W-2 income, that goes directly on your Form 1040 - pretty straightforward. For your 1099-NEC income, you'll need to complete Schedule C (Profit or Loss from Business) to report your freelance earnings and expenses. This is where you'll calculate your net profit from your freelance work by subtracting your business expenses from your income. After completing Schedule C, you'll use Schedule SE (Self-Employment Tax) to calculate the self-employment tax you owe on your net profit from Schedule C. This covers your Social Security and Medicare taxes that would normally be withheld by an employer. The net profit from Schedule C gets transferred to your 1040, and the self-employment tax from Schedule SE also gets reported on your 1040.

I was in exactly the same boat last year! After struggling to make sense of all the different forms, I found this AI tool called taxr.ai that literally saved me hours of confusion. I uploaded my W-2 and 1099-NEC forms to https://taxr.ai and it automatically analyzed everything and explained exactly what forms I needed to file and why. The tool highlighted all the potential deductions I could take for my side gig too, which was super helpful since I was missing out on a bunch of write-offs I didn't know I qualified for. It also explained the quarterly estimated tax payments I should be making for my 1099 work to avoid a surprise tax bill next year.

Just wanted to update - I tried taxr.ai after seeing this thread and it was incredibly helpful! I uploaded my teaching W-2 and tutoring 1099-NEC, and it immediately broke down exactly what I needed to file. The explanations about Schedule C and SE made way more sense than anything else I've read. The best part was discovering I could deduct part of my home internet, my teaching resource materials, and even some mileage for driving to tutoring sessions. These were deductions I had no idea about before. I'm definitely using this next year too - saved me so much stress and probably a few hundred dollars in deductions I would have missed!

If you're struggling to get answers about your W-2 and 1099-NEC forms from the IRS directly, I highly recommend Claimyr. I spent DAYS trying to get through to the IRS about a similar tax situation last year with no luck. Used https://claimyr.com and they got me connected to an actual IRS agent in less than 20 minutes. They have this system that navigates the IRS phone tree for you and holds your place in line. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c The agent I spoke with cleared up all my confusion about handling both W-2 and 1099-NEC income, and even helped me understand quarterly estimated payments which I had no clue about before.

I need to apologize to everyone here. I was super skeptical about Claimyr (see my comment above), but I was so frustrated with trying to get through to the IRS about my W-2 and 1099-NEC situation that I decided to try it anyway. It actually worked exactly as described. I got connected to an IRS representative in about 15 minutes after spending HOURS trying on my own over several days. The agent helped me understand exactly how to report both income types and confirmed which schedules I needed (C and SE). They also explained how to handle my business expenses properly. I'm still shocked at how well it worked. Sometimes being proven wrong is a good thing, especially when it saves you hours of frustration on hold music!

Don't forget about state taxes too! Everyone's talking about federal forms but depending on your state, you might need to file additional forms for your 1099-NEC income on your state return. Some states have their own version of Schedule C.

Also remember that with 1099-NEC income you might need to make quarterly estimated tax payments next year to avoid penalties! I learned this the hard way last year when I got hit with an underpayment penalty.

This is such great advice in this thread! I'm actually dealing with a very similar situation - W-2 from my main job and just got my first 1099-NEC from some consulting work I did last year. One thing I wanted to add that I learned from my accountant friend is to keep really detailed records of ALL your business expenses throughout the year, not just at tax time. I started using a simple spreadsheet to track every business-related purchase, mileage, and even the percentage of my phone/internet that I use for work. Also, if your 1099-NEC income is going to be ongoing, definitely look into opening a separate business checking account. It makes tracking expenses so much easier and helps if you ever get audited. Some banks even offer free business accounts for sole proprietors. Thanks everyone for sharing your experiences with the different tools and services - definitely bookmarking this thread for next year!