If my 1099 income is below the standard deduction threshold, do I still need to pay social security taxes?

Thanks for the clarification. So even if I don't owe income tax, I still have to file a tax return just to pay the self-employment tax? And is that 15.3% calculated on the full $11,700 or can I subtract some expenses first?

Yes, you'll need to file a tax return to report your self-employment income and pay the self-employment tax, even if you don't owe income tax. The 15.3% is calculated on your net profit, not your gross income. So you can deduct legitimate business expenses first using Schedule C. Things like supplies, software subscriptions, portion of internet if used for business, professional development, etc. This will lower your taxable self-employment income. Keep good records of these expenses in case of an audit.

How does that tool actually work? Does it connect to your bank account or do you upload statements? I'm always nervous about giving access to my financial accounts to random websites.

I've seen ads for that but wasn't sure if it was worth it. I'm making about $800/month from my Etsy shop and YouTube channel combined. Would it still be helpful for someone with relatively low 1099 income like me?

The tool gives you options - you can either connect accounts securely (they use the same encryption as banks) or just upload statements if you prefer. I was nervous too, so I just uploaded PDFs of my statements and it worked great. For someone making $800/month, it would definitely be helpful. That's about $9,600 a year in 1099 income, which means you'd owe around $1,470 in self-employment taxes if you don't find deductions. I was making about that much and the tool helped me identify legitimate deductions that reduced my taxable income by almost 30%. It specifically looks for expenses related to your type of business.

How much does that service cost? The IRS phone system is a nightmare but I'm not trying to pay a fortune just to talk to someone I should be able to reach for free.

Sounds like a scam tbh. How do they supposedly get you through when everyone else is waiting? They probably just collect your info and sell it to marketing companies.

The service is very affordable considering how much time it saves. They don't share the exact price on their website since it can vary, but it was definitely worth it to me to not waste hours of my life on hold. They're not doing anything sketchy to get you through - they use an automated system that basically waits on hold for you and uses technology to navigate the phone tree. They literally just call you when an actual human at the IRS picks up. Nothing is recorded and they don't collect any tax information from you - they're just connecting the call.

Wait so I get to deduct part of the taxes I'm paying... from my taxes? That sounds too good to be true. Is this some special rule for self-employed people?

Yes, it's a special deduction for self-employed people! When you're an employee, your employer pays half of your Social Security and Medicare taxes. When you're self-employed, you're paying both halves (that's why it's 15.3%). The deduction for half of your self-employment tax is basically the government's way of putting you on more equal footing with traditional employees. It doesn't reduce your self-employment tax itself, but it can reduce your income tax in years when you earn enough to owe income tax.

This is so important! I learned this the hard way my first year of freelancing. I'd recommend putting 25-30% of each payment into a separate savings account specifically for taxes.

This is such great advice! I wish I had known about tracking expenses from the beginning. I'm just starting out with freelance work and have been throwing all my receipts in a shoebox like it's 1995. Quick question - for the phone/computer percentage, do you just estimate or is there a specific way to calculate it? I probably use my laptop about 60% for work but I'm not sure how to prove that if asked. Should I be tracking my usage somehow or is a reasonable estimate okay? Also, what counts as "office supplies" for content creators? I'm assuming things like memory cards and batteries for my camera, but what about stuff like coffee if I'm working from home? Trying to figure out where the line is!

For phone/computer percentage, a reasonable estimate is generally fine, but it's smart to document your reasoning. You could keep a log for a week or two showing actual usage to support your estimate, or note specific work activities (video editing, client calls, research, etc.) vs personal use. For office supplies, memory cards and camera batteries definitely count! Coffee gets trickier - if you're meeting clients at a coffee shop, that's deductible, but your daily home coffee habit probably isn't. The IRS test is whether it's "ordinary and necessary" for your specific business. Other content creator expenses that might qualify: lighting equipment, tripods, microphones, editing software subscriptions, stock photo/music licenses, props for videos, even costumes or specific clothing if they're only for content creation. Just keep good records showing the business purpose!

This is really helpful advice about quarterly payments! I'm just getting started with understanding all this self-employment tax stuff. Quick question - when you say "100% of last year's total tax liability," does that include the self-employment tax portion, or just the income tax? Since this is my first year earning 1099 income, I'm assuming I'd need to use the 90% of this year's expected tax option? Also, thanks for mentioning the mileage deduction! I drive to various locations for content shoots and had no idea I could deduct that. Do I need to keep a detailed log of each trip, or is it okay to estimate based on my typical monthly business driving?