Independent Contractor Tax Write Off Question?

Aug 9, 2015

  1. noah808us
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    noah808us Expert

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    If I am an independent insurance contractor I would need to file a 1099 or 1040 and pay 33% of my income to Uncle Sam. How much of that 33% can I write off for business expenses and do I need to pay 33% of my profits or revenues? Is there any other tax issues I should be aware of?
     
  2. sshafran
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    sshafran Guru

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    One of my biggest expenses is my CPA. Last week I sold my arm on ebay to pay his fee. An invoice for a leg arrived today. I don't care...I don't even think about not using one anymore...

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    In other words... their answers matter. Our answers mean little to nothing.
     
  3. walthamny
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    walthamny Guru

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    If you are a one man shop, why would you hire a CPA. You need a bookkeeper. You can also use many accounting software or hire a CPA for few hours and hire part time bookkeeper. I can see the need for CPA if you had a partnership and 10 employees, even then you need them for only few hours a year.
     
  4. sshafran
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    Not sure what you mean.

    I wasn't implying that he was on my personal staff...

    But his office takes care of everything, from our payroll (and all taxes associated with that) to bookkeeping to filings to paying (most) taxes (sometimes I still have to sign a check... most are automatic)...

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    In addition to all of that, he also helps answer questions like the OP asked...
     
    sshafran, Aug 10, 2015
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  5. phoward
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    phoward New Member

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    I would also be interested in what independent agents claim for tax man. What can you write off as a business expense? Mileage, postage, gas, supplies or other items? What is the best way to track mileage if you write it off.
     
    phoward, Aug 10, 2015
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  6. vic120
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    I am no expert and probably missing some of the extra's but all basics are expenses. milage will encompass gas and repairs.all supplies are covered including postage lead and such
     
    vic120, Aug 10, 2015
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  7. sshafran
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    TripLog GPS app.

    Allows you to easily track everything, run reports, etc. I think I have an upgraded version which allows custom reporting...but it's dirt cheap.

    It can even save maps of your route, if you want it to. That's a bit overkill for me...but it just shows some of the features...

    Since I have an s-corp, I do an employee reimbursement form monthly and write a check to myself for the miles.
     
    sshafran, Aug 10, 2015
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  8. indienoise
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    It's so much easier and cost effective to write off travel expense based on mileage vs. actual expense.

    The OP may not be making enough money yet to hire an accountant. If so, I can understand that.

    Still, expenses should be pretty straightforward. Especially if you pay for internet fax, e-signature, website/email, etc. Do you use your personal cell phone, or have a separate business line? If you use your personal phone for business, write off the percentage of the bill in proportion to how much you use that phone for business. If you have a separate business line, it's easy to figure your phone expense. Same with internet service. Did you purchase any software or hardware to use for work? Postage?

    That's just scratching the surface of what you can write off. At the very least, you should spend a few bucks on some kind of software to help you file. I've been using taxact for the past 10 years, it does the trick. If you keep good records, it shouldn't take more than a couple of hours. I'm sure there's comparable competition out there.
     
  9. noah808us
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    Does anyone know out of that 33% how much you can write off? Can you write off all the 33%?

    I know if you write under a LLC it is 15% in taxes. Out of that 15% how much can you write off?
     
    Last edited: Aug 10, 2015
  10. indienoise
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    I think you lack a basic understanding of how this works.
    You need either software to hold your hand, or a professional to do it for you.
    You take your gross income, make all your deductions, THEN you figure your amount owed based on your net income.
    You're not going to spend more than a hundred dollars on the software you need. Some options will cost you less than that. It's worth every penny.
    All you worry about doing is plugging in your numbers when prompted for them by your tax software, and let it do the figuring. I've NEVER filed by hand, and wouldn't recommend it for you. Use software, or get an accountant.
     
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