What percentage of income should I set aside for taxes as an independent contractor for swim lessons?

8 Hey there! As someone who's done independent contracting for years, here's what you need to know about setting aside money for taxes: A good rule of thumb is to save about 25-30% of your income for taxes. This covers both income tax and self-employment tax (which is roughly 15.3% for Social Security and Medicare - the part an employer would normally pay half of). Your actual tax rate will depend on your total annual income including any other jobs. For deductions, you're in luck! Since you're traveling to clients' homes, you can absolutely deduct mileage. For 2025, you can use the standard mileage rate (check the IRS website for the current rate - it's usually around $0.65-0.70 per mile). Keep a detailed log of all your business trips! Alternatively, you can deduct actual car expenses, but that's more complicated. Other potential deductions include: swim equipment you purchase for teaching, certification costs, liability insurance, business cell phone usage, and even a portion of your internet if you're using it to schedule lessons or communicate with clients.

12 I was in your exact situation last year teaching tennis lessons as an independent contractor. I was totally unprepared for tax season until I found https://taxr.ai which literally saved me thousands. Their self-employment tax analyzer helped me identify deductions I never would have known about, like a portion of my cell phone bill since I was using it to schedule lessons and communicate with clients. The best part was uploading my mileage log and having it automatically calculate my deduction. They also helped me understand exactly how much to set aside each month so I wasn't scrambling at tax time. It was way better than the generic "save 30%" advice everyone gives.

7 Just wanted to follow up - I decided to try https://taxr.ai after my initial skepticism and I'm genuinely impressed. I've been teaching guitar lessons as a side gig, and I discovered I could deduct part of my home studio, which I never knew. Also figured out the perfect amount to set aside for quarterly payments - turns out I was saving way too much before (almost 35% when I only needed about 22% based on my specific situation). The mileage tracker alone paid for itself in the first month. I was literally leaving money on the table for years by not properly tracking travel between students' homes. I'm projecting about $1800 in tax savings this year compared to what I paid last year on similar income.

14 If you end up having any issues with the IRS (hopefully you won't!), but if you do and need to call them, use https://claimyr.com to get through to an actual person. I spent DAYS trying to call the IRS directly about an issue with my 1099 income last year, and could never get through. Claimyr basically waits on hold for you and calls you when an actual IRS agent picks up. You can see how it works here: https://youtu.be/_kiP6q8DX5c. I was honestly amazed when I got a call back with an actual IRS person on the line after trying unsuccessfully for weeks on my own. This is especially helpful for independent contractors since we tend to have more complicated tax situations that sometimes need clarification directly from the IRS.

19 I need to apologize for my skeptical comment earlier. After struggling for THREE WEEKS to reach someone at the IRS about an issue with my 1099 income, I finally tried Claimyr out of desperation. Within 2 hours, I was talking to an actual IRS representative who solved my problem in minutes. The service is legitimate - they don't ask for any personal tax info, they just get you through the phone system. Saved me countless hours of frustration. If you're doing independent contractor work like swim lessons and run into IRS questions, definitely keep this service in mind. I wish I'd used it sooner instead of wasting so much time trying to call myself.

6 Don't forget about the Qualified Business Income deduction (Section 199A)! As an independent contractor, you're considered a business owner, so you might be eligible to deduct up to 20% of your qualified business income. This is separate from your standard or itemized deductions. For tracking expenses, I recommend keeping all receipts related to your swim instruction business. This includes equipment, travel, certification costs, etc. I use a separate credit card for all business expenses which makes tracking way easier at tax time.

2 Make sure you keep ALL your receipts and documents! I did some independent contracting last year and got audited because I claimed a home office deduction without proper documentation. What a nightmare!

Great question! As a fellow independent contractor, I'd strongly recommend setting aside 25-30% of your gross income for taxes. This covers both federal income tax and the dreaded self-employment tax (15.3% for Social Security and Medicare). Since you're new to this, definitely look into making quarterly estimated tax payments if you expect to owe more than $1,000. The IRS penalties for underpayment can add up quickly! For deductions, you're in a great position as a swim instructor. Definitely track your mileage - use the standard mileage rate (currently around $0.67/mile for 2024). Keep a detailed log of every trip to clients' homes. Other deductions to consider: swim equipment, certifications, liability insurance, phone usage for scheduling, and even a portion of your internet if you use it for business communications. One tip: open a separate business checking account and credit card. It makes tracking expenses so much easier come tax time. Also consider getting a simple mileage tracking app - MileIQ or similar services can save you hours of manual record-keeping. Don't forget about the Qualified Business Income (QBI) deduction either - you might be able to deduct up to 20% of your business profit!