My mind is blown by this video having like 12 and a half views. THIS IS SO GOOD AND ESSENTIAL AND GORGEOUSLY DONE!!!! Maybe I’m finally ahead of the curve and identified the next RU-vid tax superstar before the rest of the internet.
Thank you. I’m self employed, I made roughly $78k last year, and the tax accountants just got my taxes done and told me my est. taxes are $12.5k, but like that’s roughly what I come out with if I have zero deductions anywhere, but… I have my personal and business deductions.
And I too and blown away that you don’t have more likes and followers! Praying for a well deserved increase and support your way. Your content is ON POINT! B
I just came across your videos and mad I didn’t find you sooner! Your videos are awesome! So informative, short, personable, relatable, and to the point. Thank you so much! I’m now a subscriber and look forward to future content. Wishing you blessings in abundance!!
Now that's some powerful information. I pray it's correct. I have an LLC for asset protection and was researching this topic and your video came up. Liked and subscribed!
Great video, I was filing and saw the 12000 deduction wasn’t applied when using freefillable. This video verified my exact thought, business revenue rather than W2 income, “personal”. Thank you.
Oh my gosh, Tyra, I think I love you. Thank you SO MUCH for this video, I spent hours trying to google to find this exact piece of info (whether I could deduct business expenses on top of the $12K standard deduction) and found nothing helpful. This video just alleviated so much stress for me. THANK YOU!!! Also, quick question: I am a full 1099. Does that mean I do not benefit in any way from the $12k personal deduction? For example, if my income was $50,00 and all 1099, does this mean that I can ONLY deduct business expenses, and the personal standard deduction of $12k does not apply to me? OR does it mean that I can take my $50k 1099 income, subtract $12k as the standard business expense, then subtract all of my business expenses, and then only pay taxes on whatever is remaining after that?
Hi! Yes - even if you only do a 1099 job, you're still eligible to claim either the standard deduction or itemized deductions. No matter which you pick, you get to claim your business write-offs on top of that.
Thanks for the video. But I still have a question, if I do not have a main job and only receive income as self-employed, can I write off the standard deduction?
Ok my husband and I are both only 1099s, I love deductions so we don’t owe as much to the IRS but then we in turn don’t show we make as much as we actually did? How do I balance this?
Hi! I'm new to taxes, so I'm self teaching 😞.... question, So if you're 100% 1099 (no W2) can you still claim standard deduction? (I'm assuming NO, but I don't know because I didn't know the information you just spoke about until now, lol) thanks
Hi, Tiffany! Taxes can be tricky, but it's really cool that you're self-teaching :) If you're 1099% 1099, you actually CAN still claim the standard deduction - and you can go ahead and claim your business deductions on top of it. If you'd like some more study material, check out our article on the standard deduction for 1099 workers: www.keepertax.com/posts/can-i-take-the-standard-deduction-and-deduct-business-expenses
Really good question, Geneva! The standard deduction only applies to the income tax portion of your quarterly payments - not the self-employment tax portion. To figure it out, you'd basically take your gross pay, subtract standard deduction for your filing status, and then use the resulting net pay to figure out what tax brackets you fall into. For example, say you're a single filer with $50,000 in 1099 income. You'd subtract your standard deduction ($12,550), resulting in your "taxable income" ($37,450). Of that, the first $9,950 would be taxed at 10%, and the remainder taxed at 12%. Multiply that out and divide by 4, and you'd get the federal income portion of your quarterly taxes. In practice, though, your income taxes wouldn't be divided up from your self-employment taxes in this way - you'd cover them in the same quarterly payment. So if you want a simpler and more complete answer without having to do it by hand, you can use this quarterly tax calculator, which assumes you're taking the standard deduction: www.keepertax.com/quarterly-tax-calculator
Thanks for the info and the great presentation. All of my income last year was 1099 and I have a somewhat unique situation because I live overseas and my wife is a non-resident/non-US citizen. I'm trying to decide if it's worth it to apply separate or jointly, because it would double the standard deduction. But my wife would need to apply for a Tax ID number and report her income (which was very small) and according to the Keeper Tax calculator, my liability would be roughly the same.
This is a pretty tough one to give a definitive answer on without knowing all the specifics of your situation! In general, filing jointly will usually give you the most manageable tax bill, for exactly the reason you've pointed out. Still, it's not always the case. If you're able to get your business income down with write-offs, it's definitely possible that filing jointly wouldn't lower your tax liability - which means it wouldn't be worth the hassle for your wife!
The example in this video helps so much! I have one follow up question. I am a full time worker on a W2, but have a video side hustle on the side. I got a bigger 1099 gig half way through the year last year. Do I still account for potential write offs before this gig? I was still doing my side hustle but not a lot of money was coming in during the first half of the year.
Hi, there! If you're asking whether you can write off expenses from before your bigger 1099 gig got profitable, the answer is yes - as long as you bought them for work purposes and you were already trying to make that side hustle work by the time you paid for them! The IRS understands that new businesses, especially, can take a while to get off the ground. It's not unusual for people just starting out to have a lot of business expenses compared to their income. Hope that helps!
I had a W2 job until September and started Doordashing in October. So I can write off mileage and claim standard deduction for the 2021 tax year? Sounds great!
@@Alexandra-fz7lk You certainly can account for your mileage deductions when you make your quarterly tax payments. But you don't have to. If you pay quarterly, don't subtract your mileage, and end up overpaying as a result, you'll actually get a refund!
@@KeeperTax I didn't have enough to give Uncle Sam an interest free loan. Turns out, because I qualify for the EITC due to having a disabled child (who is 20), I owe nothing. I should get the EITC in spring. The IRS site is actually helpful for walking you through if you don't mind plodding through worksheets and the like.
I'm a full-time freelancer and my partner is a W-2 worker. We've been filing jointly, and my understanding is that we have forgone the standard deduction (for both of us) because I have to itemize my deductions in order to reduce my taxable income. Can we actually claim the standard deduction for a married couple filing jointly and submit my itemized business expenses? I've been googling for an hour and getting different answers everywhere!!
Hi, Meg! Yes, you can absolutely claim the standard deduction as a couple and submit your itemized business expenses. The two are completely separate. The thing you CAN'T do if you take the standard deduction is itemize your personal expenses, like mortgage interest and medical expenses! Your business expenses are still deductible even if you take the standard deduction because the standard deduction only reduces your income taxes. And as a business owner, you have to pay self-employment tax on top of income taxes- which is where the business write-offs come in. Here's an article where you can learn more: www.keepertax.com/posts/can-i-take-the-standard-deduction-and-deduct-business-expenses
Great question! You'll have to choose which way you prefer to write off your car expenses. You can't deduct both business miles AND expenses like gas at the same time. If you'd like to learn more, here's an article on the difference between the two methods, including pros and cons, rules for switching between them, and a breakdown of which method is best for different kinds of drivers: www.keepertax.com/posts/mileage-vs-actual-expenses
For some reason Turbo Tax is adding a standard deduction on my self employment. I'm trying to just deduct mileage for my driving jobs. Then I'm gonna enter my W-2 for my main job. Do you know how to get this off of there? Or will it fix itself once I enter in my W-2?
Hi there, Lenny! I'm afraid we're not TurboTax experts - we've actually developed our own tax software just for freelancers! But based on what you're describing, it doesn't actually sound like you're encountering an error. You actually are allowed to take the standard deduction on top of the deductions associated with your self-employment, like your mileage! If you're having a rough time with TurboTax, feel free to give our software a try ;) You can see a demo of it here: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-9TDjXTfvFfs.html Or get started using it here: keeper.tax/e/fafLR2ro6kb
If one doesn't receive a 1099 but gets payment directly from a client, does everything in the video still apply? What if one hasn't started making money yet but has start up expenses?
Both great questions, Ife! If you don't receive a 1099 but do get paid by a client, everything in the video still applies, yes. (This is actually pretty common, since clients aren't required to give you a 1099 if they paid you less than $600!) As for startup expenses, you can definitely write them off even if you haven't started earning money yet! (This is also pretty common for freelancers.) The key is, you have to be actively trying to make money - cold-emailing clients, offering free trials to attract customers, bidding on jobs, and other kinds of active marketing. You can read more about startup costs here: www.keepertax.com/posts/startup-costs
Hi, I have another question, Does part of the Turbotax fees that can be deducted for filing the 2022 tax return (Schedule C) applies to that year (2022) or to this year,2023?
I’m sorry if I have a lot of questions, but I do really appreciate your videos and just want to clarify this, can i deduct the fees I am paying for turbotax for my self-employment taxes?
Good question, Raymond! Since you're self-employed, you can definitely deduct part of your TurboTax fees! The trick, though, is that you can only deduct the part of your fees that pay for the business part of your tax return - personal tax prep, after all, is something you would have paid for even if you weren't self-employed! So, for example, if TurboTax charges $70 for the base software, but you paid $180 for the self-employed edition, you'd get to deduct $180-$70, which would be $110. (Keep in mind, these numbers are just examples and might not reflect TurboTax's actual pricing!)
@@KeeperTax Hi, I have a follow-up question, If I'm deducting part of my Turbotax fees today to my 2022 tax return, that deduction will fall under the year 2022, right? Even the transaction of paying the fee will fall under this year 2023. Please correct me if this is wrong.
Hi. I have a question and I hope you can answer it. What if your only source of income is from your 1099 self-employment job and you are taking a standard deduction. Will that be considered a business standard deduction? if Yes, can I still deduct business expenses on top of that? I'm 100 percent 1099 and no W2.
Hi, Raymond! You can definitely deduct business expenses on top of the standard deduction, whether or not you're 100% 1099 or partially 1099. The standard deduction actually isn't considered a business deduction, even for people like you, whose only source of income is self-employed work. It's still a deduction designed to capture various kinds of personal expenses!
Hi! I am full time freelance and my income comes from a few different types- 1099 mostly for 2022 but also a good amount of W9 income. Can I add my business expenses for my W9 income AND 1099 on top of standard deduction? Or just business expenses for 1099?
