I HAVE A 1099 — HOW CAN I PREPARE FOR TAX SEASON?
Many people who receive a 1099 think the process is the same as when they receive a W-2, but there are important differences that can affect how much they pay in taxes or how much they could legally save.
When you receive a 1099, you are usually considered an independent worker or contractor. This means that, in many cases, taxes were not automatically withheld during the year.
For that reason, preparing in advance can help you avoid surprises when tax season arrives.
Some important things you should do include: • Keep a record of all your income • Save receipts related to work or business • Track miles driven if you use your vehicle for work • Separate personal expenses from business expenses • Review bank statements and payments received
Expenses some people may consider depending on their situation: • Gas and mileage • Cell phone • Internet • Tools or work equipment • Advertising and marketing • Materials and supplies related to work
Common mistakes many people make: • Thinking that if they didn't receive a 1099 form they don't have to report income • Not saving receipts during the year • Mixing personal expenses with business expenses • Waiting until the last minute to organize documents
Now more than ever it is important to: ✔ Keep income organized ✔ Save important documents ✔ Track work-related expenses ✔ Prepare before tax season ✔ Seek guidance if you have questions
Good organization throughout the year can make a big difference and help reduce stress when it's time to file taxes.
If you need help preparing or have questions about your 1099 income, call us at 314-330-4425.
RESOURCES: For people who use their vehicle for work or business, we recommend apps like MileIQ to automatically and neatly track the miles you drive throughout the year. It can help you keep clearer, more organized records for tax season. Use our link to get 20% off: https://mileiq.com/lp/referral?referrerParseId=8WcrmqR2EeexZxLrE8-nqA
