Job has me as a vendor instead of 1099 contractor - tax implications?

Thanks for clarifying this! I'm not the OP but I'm in a similar situation - I'm in Texas providing graphic design services. Do I need to collect sales tax? My clients are all saying different things and I'm getting confused.

For Texas, graphic design services are generally taxable. Texas considers most professional services related to creating, designing, or producing tangible personal property (including electronic files) to be taxable. You should register with the Texas Comptroller and collect sales tax from your Texas-based clients. For clients outside of Texas, you typically don't need to collect sales tax, but check if you have economic nexus in other states where your clients are located. If you've been operating without collecting sales tax, you might want to consult with a tax professional about addressing any past liability.

Thank you for this explanation! That makes me feel better. I'm in California providing writing and editing services. So based on what you're saying, I still need to report all the income on Schedule C regardless of what they call me in their system. One thing still confuses me though - if they don't send me a 1099-NEC, how do I prove I reported everything correctly if I get audited? Should I be asking them for some other kind of documentation?

For California, writing and editing services are generally not subject to sales tax, so you don't need to worry about collecting sales tax for those services. Regarding documentation, keep detailed records of all your income including invoices, payment confirmations, bank deposits, and any correspondence with clients. These records are your proof in case of an audit, even without a 1099. Many self-employed individuals report income that never appears on any 1099s - the IRS understands this is common. Just make sure your reported income matches your bank deposits, as that's something the IRS can verify.

Did it actually help figure out if you needed to charge sales tax? That's my biggest confusion with clients. Some want me to add it, others don't.

This sounds too good to be true honestly. How does it know the sales tax rules for every state and every type of service? Tax laws change all the time.

Yes, it definitely helped with the sales tax question. I just entered my state and described the exact services I provide, and it gave me specific guidance on whether I needed to charge sales tax. It even explained how to register for a sales tax permit in my state and how to report it. The tool stays updated with current tax laws through regular updates. You're right that tax laws change frequently, but that's actually why I found it so helpful - it's specifically designed to keep up with those changes across different states and service types. It also provides citations to the specific tax codes so you can verify the information if you want to double-check.

How does this actually work? Does it just dial for you or something? I don't understand how they can get through when no one else can.

Sorry but this sounds like a scam. Nobody can magically get through to the IRS when their lines are jammed. What's the catch here? Do they charge a fortune for this "service"?

It's not just auto-dialing - they use a combination of technologies that navigate the IRS phone tree and hold systems more efficiently than a person manually calling could. When they secure a spot in the queue, they immediately call you and connect you directly to that spot in line. No more waiting on hold for hours! There's no catch - they're simply solving a real problem that frustrates millions of taxpayers every year. The service is completely legitimate and has helped thousands of people connect with the IRS when they otherwise couldn't get through. The value is in saving potentially days of repeated calling and hours on hold. I was initially skeptical too, but after wasting so much time trying to get through myself, it was absolutely worth it to get definitive answers about my tax situation directly from the IRS.

Do you use any specific software to track expenses? I've been just using a spreadsheet but wondering if there's a better way, especially for separating business vs personal when I use the same account for both sometimes.

I started with spreadsheets too but switched to QuickBooks Self-Employed and it's been a game-changer. It connects to your accounts and lets you swipe expenses as business or personal right from your phone. It also automatically tracks mileage if you drive for work. If you want something simpler/cheaper, many people like Wave (free) or FreshBooks. The key is finding something you'll actually use consistently. Even a good spreadsheet is better than no tracking at all! Just make sure you keep receipts for everything - digital copies are fine for most expenses under $75, but I still recommend backing them up in multiple places.

How do you calculate what to pay each quarter if your income is irregular? I have some months where I make a lot and others where it's nearly nothing.

For irregular income, you have a few options. The easiest is to use the "safe harbor" rule - pay 100% of last year's total tax liability divided by 4 quarters (110% if your AGI was over $150k). This protects you from penalties even if you end up owing more at year-end. If you want to be more precise, you can use Form 2210 Schedule AI to calculate based on actual income each quarter. This means paying higher amounts in good months and lower (or zero) in slow months. Just make sure you keep detailed records of when you received payments. Another approach is to set aside a percentage of each payment as it comes in (typically 25-30% for self-employment) in a separate tax savings account. Then when quarterly deadlines hit, you'll have funds available regardless of that quarter's specific income timing.

Great advice about keeping detailed records! I'm new to self-employment and this whole thread has been incredibly helpful. One question - when you mention business insurance, how do you even figure out what type you need? I'm doing marketing consulting work and have no idea where to start with insurance requirements. Also, do most clients actually ask to see proof of insurance before working with you, or is that more industry-specific?