Contract Working - 1099

[Rosie the Riveter]

Another tid-bit -- Companies only "have" to report 1099s if they are more than $600.

Well, unless they want to give me more than 10 separate payments for the same project...

I'm glad that's not going to help you...Your $$$$ sound better... Just start a file and stick in everything that is "work" related. Computers, internet access, travel, clothing, entertaining your customers, etc.... and take your taxes to a good accountant.

Okay... I'm not sure exactly how I'll do this, though, because if the article from monster.com linked above is at all accurate, I don't see anything that will be accepted as "deductible" for these particular contracts I'm referring to.

Alright then my only other suggestion is that you could start a business and have the company you do the work for pay the business (you'd invoice them)-- If you pay for your "business" expenses, like your company car, with your business account then you are taking the $$ away from your net income and in turn your taxable income.

[Rosie the Riveter]

If you aren't operating your business at a loss, you aren't doing something right.

Where is that "gold star on the forehead" smiley?

[error]

If you aren't operating your business at a loss, you aren't doing something right.

Where is that "gold star on the forehead" smiley?

Oh, I have my own!

[KBCraig]

Okay... I'm not sure exactly how I'll do this, though, because if the article from monster.com linked above is at all accurate, I don't see anything that will be accepted as "deductible" for these particular contracts I'm referring to.

How are you going to get to the job? Unless you're walking to work, you've got one automatic deductible when working as a 1099 contractor instead of a W2 employee: mileage. When Mary was a 1099 contractor, she was able to deduct mileage on her daily commute, plus mileage for side trips to pick up and deliver customers' pets (something she did for a few elderly clients), work-specific clothing, postage and advertising for "reminder cards", all her tool and supply purchases and maintenance expenses...

We went to our tax lady dreading how much we'd have to pay, because we hadn't made any quarterly payments. Instead, we got a very nice surprise, winding up with a refund. There was about a $2k swing between my estimate, and the final result.

Now that she's back working for a corporation as a W2 employee, we don't have as many deductions, but she still has tool purchases and maintenance, and unreimbursed uniforms.

Kevin

[eques]

Okay... I'm not sure exactly how I'll do this, though, because if the article from monster.com linked above is at all accurate, I don't see anything that will be accepted as "deductible" for these particular contracts I'm referring to.

How are you going to get to the job? Unless you're walking to work, you've got one automatic deductible when working as a 1099 contractor instead of a W2 employee: mileage. When Mary was a 1099 contractor, she was able to deduct mileage on her daily commute, plus mileage for side trips to pick up and deliver customers' pets (something she did for a few elderly clients), work-specific clothing, postage and advertising for "reminder cards", all her tool and supply purchases and maintenance expenses...

We went to our tax lady dreading how much we'd have to pay, because we hadn't made any quarterly payments. Instead, we got a very nice surprise, winding up with a refund. There was about a $2k swing between my estimate, and the final result.

Now that she's back working for a corporation as a W2 employee, we don't have as many deductions, but she still has tool purchases and maintenance, and unreimbursed uniforms.

Kevin

According to the article, "commuting costs cannot be claimed, but traveling from a job with one employer to a second job with another is deductible."  In my particular situation, I probably won't have much in the way of travel expenses as the commute is really short and I won't be there every day.

I'm actually not directly contracting, now that I think about it--I'm contracting via another company.  Does that at least qualify as "travel" from one job to another?

As for everything else, eh, realistically, there won't be that many expenses... at least, probably not enough to count for a deduction.

Thanks for your help, though... I will at least retain everything "work" related in a file and then, if taking the deductions make any sense, I'll have everything in one spot.

[cathleeninnh]

Are you sure it is 1099 work? If the firm has the contract and not you, then they usually just hire you as an employee. Then it is W-2 wages.

Cathleen

[KBCraig]

According to the article, "commuting costs cannot be claimed, but traveling from a job with one employer to a second job with another is deductible."

So far as I could tell, that article was talking about W2 wages, not 1099 contracting.

When you work as a 1099 contractor, you are your own business, so almost every expense you incur in conducting your business is deductible. Including mileage traveling to the client(s).

Kevin

[JonM]

The IRS likes to reclassify 1099 workers as W2.  The easiest way around this as was said, is to be a W2 employee of your own company, which then bills the one you work for.  Otherwise there are tests the IRS applies to determine if you're really a 1099 employee.  If the company you work for supplies you with an office, tells you what and how to do what you do, sets your hours or anything like that, they'll say you should have been a W2 employee.  If you come and go as you please, supply all your own resources, then 1099 is more likely to fit.

[eques]

The latter would have fit me if they had accepted the contract.

When I asked for clarification ("clarificated??!?" what the hell????), I was told (basically) I wanted to do way too much, and instead of the "two weeks or so" that this guy suggested for the timeframe of Phase I during our informational interview (I quoted him three weeks), he said he'll take somebody off of the phones to get that done in his one week timeframe.

Ah well.  But thanks for all your comments, folks.  It's looking more and more likely that I'll be a W-2 "wage earner," anyway.

[error]

I am so glad I can walk away from situations like that.