1099 deductions

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Topic Author
redfan11
Posts: 121
Joined: Sat Oct 26, 2019 7:02 pm

1099 deductions

Post by redfan11 »

I get most of my income as a W2. Recently did some advisory work that I got paid for with a 1099. I've made around $4000 and expect maybe another 3000 by the end of the year. Its only a few hours of work so I don't know if its illegal to use a home office deduction, a monitor purchase, etc..
Katietsu
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Joined: Sun Sep 22, 2013 1:48 am

Re: 1099 deductions

Post by Katietsu »

You need to research the Sch C.

You will probably not be eligible for a home office as deduction as the first requirement is regular and exclusive use for the business purpose. Equipment that is used for both personal and business use can be fully or partially deductible. You should read up on the different rules depending on the item.
RedDog
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Joined: Sat Dec 05, 2015 3:36 pm

Re: 1099 deductions

Post by RedDog »

Highly second Katietsu‘s advice to spend a few minutes researching schedule C deductions for self-employed persons.

Many of the deductions aren’t intuitive and, given the additional 15% self employment tax paid in addition to normal income tax, can very substantially lower your tax bill.

Potentially, things such as mileage, travel, cell phones, internet service, professional licenses, office supplies, tools, ect can be claimed in part or whole.
livesoft
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Re: 1099 deductions

Post by livesoft »

I have had consulting income for decades as a side gig to my W-2 job. The people who have paid me also pay for my expenses. Therefore, I usually have no additional expenses to deduct on my 1099 income and Schedule C is trivial to fill out.

That is, I think the OP may be dreaming about business expenses that really do not exist in this case. That is, consulting based on one's expertise gained in their W-2 job is not going to lead to substantially lowering Schedule C income by having more deductions. After all, one should have no inventory, no deductible office, insignificant or even no office supplies, no significant extra and separate use of internet, no postage, .... One may have an individual 401(k), but if one is maxing their W-2 job's 401(k) deferrals, then even that may not be significant. Of course, one can create expenses that are related, but not necessary. For example, I deducted all books related to my area of expertise that my W-2 employer didn't buy for me, but there are only so many books worth buying.
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InMyDreams
Posts: 1882
Joined: Tue Feb 28, 2017 10:35 am

Re: 1099 deductions

Post by InMyDreams »

Presumably your health insurance is thru your W2 job, right?

Any traveling involved with this 1099 work?

Be aware that you will owe Self Employment tax on the 1099 work.
TheDDC
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Re: 1099 deductions

Post by TheDDC »

livesoft wrote: Sat Jul 24, 2021 10:13 pm I have had consulting income for decades as a side gig to my W-2 job. The people who have paid me also pay for my expenses. Therefore, I usually have no additional expenses to deduct on my 1099 income and Schedule C is trivial to fill out.

That is, I think the OP may be dreaming about business expenses that really do not exist in this case. That is, consulting based on one's expertise gained in their W-2 job is not going to lead to substantially lowering Schedule C income by having more deductions. After all, one should have no inventory, no deductible office, insignificant or even no office supplies, no significant extra and separate use of internet, no postage, .... One may have an individual 401(k), but if one is maxing their W-2 job's 401(k) deferrals, then even that may not be significant. Of course, one can create expenses that are related, but not necessary. For example, I deducted all books related to my area of expertise that my W-2 employer didn't buy for me, but there are only so many books worth buying.
I'm unsure as to OP's line of work, but In IT consulting, you will find many pricy deductions that pertain to a side gig up to and including elaborate "test lab" equipment. Your definition of test lab and mine may differ... :D

-TheDDC
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Topic Author
redfan11
Posts: 121
Joined: Sat Oct 26, 2019 7:02 pm

Re: 1099 deductions

Post by redfan11 »

Thank you for you replies. I am in the medical profession. I do spend a few hours a week keeping myself uptodate with the most recent literature in my field and these advisory board, consultancy 'gigs' pay me for this expertise. I was thinking I could write off some expenses for the hours I spend reviewing the literature/writing articles etc. This is a small amount compared to my W2 income, but any dollar I can save on taxes on is a dollar earned.
Gill
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Re: 1099 deductions

Post by Gill »

redfan11 wrote: Mon Jul 26, 2021 10:17 pm Thank you for you replies. I am in the medical profession. I do spend a few hours a week keeping myself uptodate with the most recent literature in my field and these advisory board, consultancy 'gigs' pay me for this expertise. I was thinking I could write off some expenses for the hours I spend reviewing the literature/writing articles etc. This is a small amount compared to my W2 income, but any dollar I can save on taxes on is a dollar earned.
You can’t deduct for your own time.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
livesoft
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Re: 1099 deductions

Post by livesoft »

redfan11 wrote: Mon Jul 26, 2021 10:17 pm Thank you for you replies. I am in the medical profession. I do spend a few hours a week keeping myself uptodate with the most recent literature in my field and these advisory board, consultancy 'gigs' pay me for this expertise. I was thinking I could write off some expenses for the hours I spend reviewing the literature/writing articles etc. This is a small amount compared to my W2 income, but any dollar I can save on taxes on is a dollar earned.
If you buy the literature and your W-2 employer or your clients do not pay you for that expense separately, then you can deduct that expense. As far as writing articles goes, if you pay out of your own pocket to have them published (page charges, etc), then that expense is deductible. But if your W-2 employer pays those expenses, then those expenses are not deductible since you did not incur them yourself.
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Topic Author
redfan11
Posts: 121
Joined: Sat Oct 26, 2019 7:02 pm

Re: 1099 deductions

Post by redfan11 »

livesoft wrote: Tue Jul 27, 2021 7:59 am
redfan11 wrote: Mon Jul 26, 2021 10:17 pm Thank you for you replies. I am in the medical profession. I do spend a few hours a week keeping myself uptodate with the most recent literature in my field and these advisory board, consultancy 'gigs' pay me for this expertise. I was thinking I could write off some expenses for the hours I spend reviewing the literature/writing articles etc. This is a small amount compared to my W2 income, but any dollar I can save on taxes on is a dollar earned.
If you buy the literature and your W-2 employer or your clients do not pay you for that expense separately, then you can deduct that expense. As far as writing articles goes, if you pay out of your own pocket to have them published (page charges, etc), then that expense is deductible. But if your W-2 employer pays those expenses, then those expenses are not deductible since you did not incur them yourself.
Thanks!
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