<p>When learning <a class="link" href="https://1800accountant.com/blog/prepare-file-small-business-tax-return">how to file small business taxes</a>, one of the top <a class="link" href="https://1800accountant.com/blog/small-business-end-of-year-tax-tips">small business tax tips</a> is to review your tax documents checklist. December is coming up fast, and that means the 2023 tax year is coming to a close with it. Wherever the numbers fall on December 31st, that’s what you have to deal with in April. It’s important to think ahead, go through your income tax checklist, and prepare your business for year-end. That way, you don't get a call from the Internal Revenue Service regarding your tax credits.&nbsp;</p>
<p>Of course, with the holidays and Q4 rush, the winter gets busy for everyone. There’s no better time than right now to gather your tax documents and get a jump start on your end-of-year tax preparation checklist.&nbsp;</p>
<p>Check out our recommendations to get ahead for tax season.</p>
<h2>Do I Need to File Taxes?</h2>
<p>First things first. Do you need to file taxes next year? Before you rely on a tax preparer, know that not everyone in the United States is actually required to file taxes each year. If you meet certain requirements, you might not be required to file a federal tax return.</p>
<h3>Under 65</h3>
<p>You may not have to file a tax return if your income is low enough. If you are under 65 and your income falls beneath the following thresholds, you generally do not need to file a federal return:&nbsp;</p>
<div class="rte-table-container">
  <table>
    <thead>
      <tr class="table-data-container">
        <td class="cell-0">Filing Status</td>
        <td class="cell-0">Income Threshold (USD)</td>
      </tr>
    </thead>
    <tbody>
      <tr class="table-data-container">
        <td>Single</td>
        <td>$13,850</td>
      </tr>
      <tr class="table-data-container">
        <td>Married filing together</td>
        <td>$27,700</td>
      </tr>
      <tr class="table-data-container">
        <td>Head of household</td>
        <td>$20,800</td>
      </tr>
    </tbody>
  </table>
</div>
<h3>Above 65</h3>
<p>Do I need to file taxes if I’m retired? If you are over 65, retired or not, you do not need to file a federal return if your income is under the following threshold:&nbsp;</p>
<div class="rte-table-container">
  <table>
    <thead>
      <tr class="table-data-container">
        <td class="cell-0">Filing Status</td>
        <td class="cell-0">Income Threshold (USD)</td>
      </tr>
    </thead>
    <tbody>
      <tr class="table-data-container">
        <td>Single</td>
        <td>$12,000</td>
      </tr>
      <tr class="table-data-container">
        <td>Married with one spouse over 65</td>
        <td>$26,200</td>
      </tr>
      <tr class="table-data-container">
        <td>Head of household</td>
        <td>$18,950</td>
      </tr>
    </tbody>
  </table>
</div>
<h2>End-of-Year Income Tax Checklist</h2>
<p>Now that you’ve determined whether you need to file a return, let’s take a look at the income tax checklist itself.&nbsp;</p>
<p>Here are the key items to ensure your personal finances are in optimal shape as you move toward December.&nbsp;</p>
<h3>1. Maximize Retirement Contributions</h3>
<p>The first item on your end-of-year tax checklist is to maximize retirement contributions. Each year, you can reduce your taxable income by putting it directly into your retirement savings. You can maximize your retirement contributions whether you have a Roth or traditional IRA, but you must do it before 2022 ends.&nbsp;</p>
<p>For 2023, the<a class="link" href="https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits#:~:text=For%202022%2C%202021%2C%202020%20and,taxable%20compensation%20for%20the%20year" target="_blank" rel="noreferrer noopener"> total contributions</a> you make each year to your traditional and Roth IRAs can't be more than:</p>
<ul>
  <li>$6,000 ($7,000 if you're age 50 or older), or</li>
  <li>If less, your taxable compensation for the year</li>
</ul>
<h3>2. Maximize HSA Contributions</h3>
<p>If you have a health savings account (HSA), you have a triple benefit opportunity.&nbsp;</p>
<p>HSA contributions reduce your taxable income, any investment growth within the account is tax-free, and qualified withdrawals for medical expenses are tax-free.</p>
<p>These are the new limits on <a class="link" href="https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/irs-2022-hsa-contribution-limits.aspx" target="_blank" rel="noreferrer noopener">tax-deductible HSA contributions</a> in 2023:</p>
<ul>
  <li>Individuals: $3,850&nbsp;</li>
  <li>Families: $7,750&nbsp;</li>
</ul>
<p>Individuals 55 and up can make an HSA catch-up contribution of up to $1,000 before the end of the year.</p>
<h3>3. Maximize Your Personal Tax Deductions</h3>
<p>If you haven’t already, you need to decide if you will itemize your deductions for 2023 or <a class="link" href="https://www.irs.gov/taxtopics/tc551" target="_blank" rel="noreferrer noopener">claim the standard deduction</a>. A common strategy is to alternate each year, which lets you maximize your personal deductions by concentrating them in the same year.&nbsp;&nbsp;&nbsp;</p>
<p>Here are the most common expenses claimed for itemized deductions:</p>
<ul>
  <li>Charitable giving</li>
  <li>Mortgage interest</li>
  <li>Property tax</li>
  <li>Other non-federal sales tax or income tax expenses</li>
  <li>Uninsured disaster losses</li>
  <li>Uninsured medical costs that exceeded 7.5% of your adjusted gross income</li>
</ul>
<p>Remember that for the upcoming tax season, there is no longer an option to claim any charitable donations unless you itemize all deductions. Whatever you choose, make sure you keep receipts and careful records of all these expenses!&nbsp;</p>
<h3>4. Contribute to 529 Plans</h3>
<p>There’s still time to maximize 529 plan contributions. These are plans designed to help families save money for future education expenses. There are <a class="link" href="https://www.sec.gov/reportspubs/investor-publications/investorpubsintro529htm.html" target="_blank" rel="noreferrer noopener">two 529 plans</a>: an education savings plan and prepaid tuition.&nbsp;</p>
<p>These qualified tuition plans are offered at the state level, so your choices may vary depending on where you reside. However, all 50 states and the District of Columbia offer at least one of the two options. 529 contributions can’t be deducted on your federal return, but tax deductibility for 529 contributions for state returns varies.</p>
<h3>5. Verify IRA Distributions</h3>
<p>If you receive disbursements from an IRA or another fund, you should verify your distributions before the end of the year. You need to be sure you stay below the proper thresholds for the 2023 tax year.&nbsp;</p>
<p>Keep up with your required minimum distribution (RMD). RMDs now apply for most retirement plans when you turn 72.&nbsp;&nbsp;&nbsp;</p>
<h3>6. Record Business Tax Deductions</h3>
<p>Another essential item on your checklist for income tax preparation is to review all of your <a class="link" href="https://1800accountant.com/blog/9-things-small-business-owners-forget-to-claim-on-their-taxes">tax-deductible business expenses</a>. If you’re a small business owner, then many of your costs can be claimed and deducted from your taxable income.&nbsp;</p>
<p>Keep precise records of all these possible expenses, and be sure to have the expenses themselves scheduled before the end of the year if you want to include them as you file your taxes in 2023.&nbsp;</p>
<p>Here are some common reasons for tax deductions for businesses:</p>
<ul>
  <li>Business travel and meal expenses</li>
  <li>Car and truck use for business purposes</li>
  <li>Office expenses and office supplies</li>
  <li>Accounting and tax software</li>
  <li>Rent and utilities for office space</li>
  <li>Business-related bank account fees</li>
  <li>Cost of goods sold</li>
  <li>Health insurance premiums</li>
  <li>Advertising and marketing</li>
  <li>Legal and accounting services</li>
  <li>FICA and self-employment tax paid&nbsp;</li>
</ul>
<h2>W-2 Employees, 1099 Employees, and the Unemployed</h2>
<p>This checklist might vary slightly depending on your terms of employment. Mostly, this will affect the tax statements form that reports your income. Regardless of the forms used, however, freelance income, employee wages, and unemployment income all count as taxable income and must be reported.&nbsp;&nbsp;</p>
<p>If you are a W-2 employee, you may not deduct business expenses for that job on your personal tax return. Business owners and 1099 freelancers can deduct business costs, and unemployed individuals may be able to deduct job search costs.&nbsp;</p>
<p>Business owners and 1099 freelancers must also make <a class="link" href="https://1800accountant.com/blog/quarterly-estimated-taxes">quarterly estimated tax payments </a>on their income throughout the year, using either their Employer Identification Number or their Social Security Number.</p>
<h2>Key Dates for the 2023 Tax Year</h2>
<p>Finally, as the tax year ends, keep in mind some key dates. These dates will help you stay ahead of the game and sail through the complex tax preparation process in early 2023.&nbsp;</p>
<ul>
  <li>13 January: IRS Free File opens</li>
  <li>17 January: Due date for the tax year 2023 fourth quarter estimated tax payment.</li>
  <li>23 January: IRS begins the 2024 tax season and starts accepting and processing individual 2023 tax returns.</li>
  <li>27 January: Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use the prior-year income to qualify.</li>
  <li>15 April: National due date to file a 2024 tax return or request an extension and pay the tax owed due to the Emancipation Day holiday in Washington, D.C.</li>
  <li>16 October: Due date to file for those requesting an extension on their 2023 tax returns.</li>
</ul>
<h3>Consult with a Professional Accountant</h3>
<p>It isn’t too late to start your end-of-year income tax checklist for 2023. Starting now will help you improve your tax situation and make tax season go more smoothly. As soon as the calendar rolls over to January, many opportunities pass you by.</p>
<p>If you’re worried about your tax obligations, or if you know you’ll need <a class="link" href="https://1800accountant.com/services/income-taxes">help with your income tax filing preparation</a>, schedule a meeting with a <a class="link" href="https://1800accountant.com/services/business-tax-advisory">tax advisor</a> now. Work with the pros at 1-800Accountant to complete your income tax checklist, and ensure you’re prepared.</p>

When learning how to file small business taxes, one of the top small business tax tips is to review your tax documents checklist. December is coming up fast, and that means the 2023 tax year is coming to a close with it. Wherever the numbers fall on December 31st, that’s what you have to deal [&hellip;]

Graphic of an 'end-of-year income tax checklist' with a calculator, pen, and financial charts on a desk.

End-of-Year-Income-Tax-Checklist_blog-header

End-of-Year Income Tax Checklist for the 2023 Tax Year

<p>Is it better to be paid via a 1099 or W-2? Are W-2 and 1099 employees the same? Whether you're starting out as an independent contractor or a new business owner, understanding the difference between a 1099 and a W-2 is essential. Use this blog as your guide in understanding each form, how they differ, and the responsibilities attached to each.&nbsp;&nbsp;</p>



<h2>What Is a 1099 Tax Form?</h2>



<p>A 1099 tax form is a way to document money that is sent or received by businesses and individuals. Small businesses can send this form to non-salaried contractors for work or services performed.&nbsp;&nbsp;</p>



<p>There are 16 different 1099 forms, which serve various business purposes. The most common are 1099-MISC (miscellaneous) and 1099-NEC (non-employee compensation). These forms document funds paid or received that haven’t been <a class="link" href="https://www.investopedia.com/articles/personal-finance/082514/purpose-1099-forms.asp" target="_blank" rel="noreferrer noopener">subject to income tax</a>. </p>



<h3>Who Completes IRS Form 1099?</h3>



<p>If you're a business owner who has worked with contractors who aren't salaried, it is your responsibility to obtain, complete, and distribute the proper Form 1099 to those workers. This form can be obtained from the IRS. </p>



<p>Things to know about completing IRS Form 1099:</p>



<ul>
<li>There is a deadline to submit 1099s to the IRS. The <a class="link" href="https://www.irs.gov/instructions/i1099gi" target="_blank" rel="noreferrer noopener">deadline is February 15, 2023</a>, for the 2022 tax year.</li>
</ul>



<ul>
<li>While each specific 1099 form has its limits, you don’t need to issue a 1099 for non-employee compensation or miscellaneous funds if you paid them less than $600 during a tax year.&nbsp;</li>
</ul>



<ul>
<li>Even though you submit a 1099 to the IRS, you are not responsible for paying income tax on 1099 funds when you submit this documentation — that’s the contractor's responsibility.&nbsp;</li>
</ul>



<h3>When Will You Receive a 1099?</h3>



<p>There is also a deadline for businesses to send contractors their 1099s — for the 2022 tax year, 1099s must be <a class="link" href="https://www.irs.gov/instructions/i1099mec" target="_blank" rel="noreferrer noopener">sent by January 31, 2023</a>.</p>



<p>If you’re a contractor and haven’t received your 1099 by this deadline, take the following steps to obtain your form by:</p>



<ol>
<li><strong>Contacting the payer</strong> – Your first call should be to the business issuing your 1099.&nbsp;</li>
</ol>



<ol start="2">
<li><strong>Contacting the IRS</strong> – If you don’t hear from the business before your income tax return is due, contact the IRS. The IRS will provide instructions for filing your income tax return and instructions for submitting your 1099 when you do receive it.&nbsp;</li>
</ol>



<p>To <a class="link" href="https://1800accountant.com/blog/how-to-issue-a-1099">issue a 1099 tax form as a small business</a>, you will need to gather details from your contractor before the deadline.&nbsp; If you are a contract worker, be aware of the <a class="link" href="https://1800accountant.com/blog/5-tax-issues-that-cause-irs-trouble-for-1099-workers">tax issues that can cause trouble for 1099 workers</a>.&nbsp;</p>



<h2>What Is a W-2 Tax Form?</h2>



<p>Businesses issue W-2 tax forms to traditional employees who were paid <a class="link" href="https://www.irs.gov/forms-pubs/about-form-w-2" target="_blank" rel="noreferrer noopener">$600 or more during a tax year</a>.<br>If you’ve worked as a traditional salaried employee, your paycheck has probably featured at least <a class="link" href="https://www.irs.gov/businesses/small-businesses-self-employed/understanding-employment-taxes" target="_blank" rel="noreferrer noopener">three regular deductions for</a>:</p>



<ol>
<li>Withheld income tax,</li>



<li>Social Security tax, and</li>



<li>Medicare tax.</li>
</ol>



<p>When these taxes are deducted from your paycheck, your employer pays them to the IRS on your behalf. And at the beginning of the following year, your employer will issue you a W-2 that lists the following:</p>



<ol>
<li>Your gross and net pay throughout the previous tax year&nbsp;</li>



<li>The amounts of federal income, Social Security, and Medicare taxes they paid on your behalf throughout the year</li>
</ol>



<p>Like a 1099 form, you’ll use your W-2 to file your income tax return for the previous tax year.&nbsp;</p>



<h3>Who Completes a W-2 Tax Form?</h3>



<p>While your employer will complete a W-2 tax form and send it to you, the information on your W-2 (and the taxes a business pays on your behalf throughout the year) will depend on critical information from your W-4 tax form.&nbsp;</p>



<p>A W-4, or Employee’s Withholding Certificate, lists the amount of federal income tax you’d like withheld from your paycheck. Ultimately, it’s up to you to determine how much of your income you’d like to withhold for tax purposes:</p>



<ul>
<li>If you choose not to withhold any federal income tax (and you’re not exempt from paying income tax), you’ll owe the IRS your entire total tax bill on the tax filing deadline.&nbsp;</li>
</ul>



<ul>
<li>If you withhold only a portion of your federal income tax, you’ll owe the IRS some of your taxes on the deadline but not your entire tax liability.</li>
</ul>



<ul>
<li>If you withhold as much as or more than you owe the IRS in federal income taxes, you either won’t have to pay anything at year-end, <em>or</em> you’ll receive a federal income tax refund. This is the most common route for traditional employees.&nbsp;</li>
</ul>



<p>While you’ll likely fill out a W-4 when you're hired, you should also fill out a new W-4 if your tax situation changes (e.g., when you get married or have a child).&nbsp;&nbsp;</p>



<h3>When Will You Receive a W-2?</h3>



<p>Like 1099s, employers must send W-2s to their employees by a certain deadline, which changes yearly. For the 2022 tax year, this <a class="link" href="https://www.irs.gov/taxtopics/tc752" target="_blank" rel="noreferrer noopener">deadline is January 31, 2023</a>.</p>



<p>Like 1099s, if you don’t receive your W-2 by the deadline, you should:</p>



<ol>
<li>Contact your employer</li>



<li>Contact the IRS if your employer doesn’t respond to your request or issue you a W-2 before the federal income tax filing deadline</li>
</ol>



<h2>1099 vs. W-2: Similarities and Differences</h2>



<p>Forms 1099 and W-2 have a few elements <strong>in common</strong>:</p>



<ul>
<li>Businesses use them to document how much they paid someone for a product or service.</li>



<li>Individuals or businesses that receive 1099s can use both forms or even a combination of the two to calculate their total tax liability for a calendar year.&nbsp;</li>



<li>It’s the recipient’s responsibility to get both forms from the entity that paid them — or reach out to the IRS if they aren’t successful.&nbsp;</li>
</ul>



<p>But, there are a few <strong>critical differences</strong> to keep in mind:</p>



<ul>
<li>W-2s are typically issued to traditional salaried employees, while 1099s are typically sent to non-employees or independent contractors.</li>



<li>In most cases, income taxes have already been paid on the funds listed on a W-2. However, most 1099 funds are typically untaxed. So, 1099 recipients will likely have a bill due on tax day, while W-2 recipients are (usually) already paid in full (or will receive a refund for overpayment).&nbsp;</li>



<li>While there’s only one kind of W-2, there are <a class="link" href="https://www.nerdwallet.com/article/taxes/what-is-1099-tax-form" target="_blank" rel="noreferrer noopener">16 different 1099 forms</a> offered by the IRS.</li>
</ul>



<h2>Filing Your Taxes with IRS Forms 1099 and W-2</h2>



<p>Should I do a 1099 or W-2? While you might receive a combination of W-2s and 1099s, you can use both to calculate your total income tax liability for the year:</p>



<ul>
<li>Information from W-2s is generally entered in the “Income” section of <a class="link" href="https://www.irs.gov/pub/irs-pdf/f1040.pdf" target="_blank" rel="noreferrer noopener">IRS form 1040</a>.</li>
</ul>



<ul>
<li>Funds listed on 1099s are generally calculated in Schedule 1 of form 1040. Each line in Schedule 1 corresponds to <a class="link" href="https://www.irs.gov/pub/irs-pdf/f1040s1.pdf" target="_blank" rel="noreferrer noopener">a different type of 1099</a>.</li>
</ul>



<h2>File Your Taxes with Ease with 1-800Accountant</h2>



<p>Whether you're a contractor or business owner, understanding the benefits of 1099s vs. W-2s is an important step in your journey. But there's so much more to know about forms and filing taxes, which is where <a class="link" href="https://1800accountant.com/">1-800Accountant</a> comes in. Our tax professionals will handle even the most complex tax forms and situations. From easy-to-understand <a class="link" href="https://1800accountant.com/services/bookkeeping">bookkeeping</a> to <a class="link" href="https://1800accountant.com/services/payroll">affordable payroll</a> to <a class="link" href="https://1800accountant.com/services/income-taxes">personal income tax preparation</a>, we have you covered.</p>

Is it better to be paid via a 1099 or W-2? Are W-2 and 1099 employees the same? Whether you&#8217;re starting out as an independent contractor or a new business owner, understanding the difference between a 1099 and a W-2 is essential. Use this blog as your guide in understanding each form, how they differ, [&hellip;]

Woman sitting at her table reviewing tax forms on paper and her laptop.

difference-between-1099-&#038;-w-2

The Difference Between a 1099 and a W-2 Tax Form

<p>There are many reasons why you might require a 1099 form this year, whether you're a contractor, a new business owner, or an established small business. If this is your first time or you haven't needed this form in a while, use this blog to learn about what a Form 1099 is, its utility, your responsibilities, and more.&nbsp;&nbsp;&nbsp;&nbsp;</p>



<h2>The Purpose of a 1099 Tax Form</h2>



<p>An IRS Form 1099 serves <a class="link" href="https://www.irs.gov/forms-pubs/about-form-1099-misc" target="_blank" rel="noreferrer noopener">two distinct purposes</a>:</p>



<ol>
<li>To document money spent or disbursed by businesses or individuals</li>



<li>To document money received by businesses or individuals</li>
</ol>



<p>The purpose of a 1099 for your tax situation depends on whether you’re the business that paid the money or the contract worker who received the cash documented on the form.&nbsp;</p>



<h3>Who Fills Out a 1099?</h3>



<p>If your business has used workers who aren't salaried, it is your responsibility to obtain, complete, and distribute the proper Form 1099 to those contractors. This form can be obtained from the IRS.</p>



<p>As long as you’re the contractor receiving funds, you don’t have to complete a 1099 — you just have to wait for yours to be issued to you. </p>



<h3>Who Receives a 1099?</h3>



<p>If you performed non-salaried work for a business or other entity, you will <a class="link" href="https://www.fool.com/retirement/2017/02/27/6-types-of-1099-forms-you-should-know-about.aspx">receive a 1099 in January</a>.</p>



<p>Other reasons why you might receive a 1099 include the following:</p>



<ul>
<li>You sold a product or service to an individual or business that does not employ you</li>



<li>Your mortgage lender canceled some (or all) of your home loan&nbsp;</li>



<li>You sold or bought stocks, bonds, shares, or other securities</li>
</ul>



<p>It’s important to note that just because someone sent you a 1099 doesn’t mean that the money they’re documenting is income you’ll have to pay taxes on when you file your return.&nbsp;</p>



<h2>16 Types of 1099 Forms</h2>



<p>Not sure <a class="link" href="https://www.nerdwallet.com/article/taxes/what-is-1099-tax-form" target="_blank" rel="noreferrer noopener">which type of 1099 you need to issue</a>? While certain 1099s are more common than others, you will use one of the following forms depending on the nature of your work or business. </p>



<ol>
<li><strong>1099-A </strong>– Funds canceled in a mortgage loan</li>



<li><strong>1099-B</strong> – Proceeds from securities sales and bartering</li>



<li><strong>1099-C</strong> – Canceled or settled credit card debt</li>



<li><strong>1099-CAP</strong> – Profits made on corporate shares</li>



<li><strong>1099-DIV</strong> – Dividends received on savings or brokerage accounts</li>



<li><strong>1099-G</strong> – Money received from a government program (like unemployment)</li>



<li><strong>1099-INT</strong> – Interest earned in any kind of financial account</li>



<li><strong>1099-K</strong> – Money received via credit card or a payment platform (like Paypal)</li>



<li><strong>1099-MISC</strong> – Catch-all funds that don’t fit into other 1099 form categories</li>



<li><strong>1099-NEC</strong> – Money earned from someone who isn’t your employer</li>



<li><strong>1099-OID</strong> – Money spent on securities sold at a discount from their face value</li>



<li><strong>1099-PATR</strong> – Patronage dividends from a co-op</li>



<li><strong>1099-Q</strong> – Funds disbursed from a prepaid college plan</li>



<li><strong>1099-R</strong> – Distributions from a retirement account</li>



<li><strong>1099-S</strong> – Proceeds from a real estate transaction</li>



<li><strong>1099-SA</strong> – Money taken out of your HSA</li>
</ol>



<h2>How to Use a 1099 to File Your Tax Return</h2>



<p>If you send a 1099 form to someone else, you don’t need to include this document in your tax return. But you do have to send it to the IRS by the deadline for the 2022 tax year, which is <a class="link" href="https://www.irs.gov/instructions/i1099gi">February 15, 2023</a>.</p>



<p>If you receive a 1099, and the money it’s documenting is taxable income, you must include information from the 1099 on your <a class="link" href="https://www.irs.gov/forms-instructions" target="_blank" rel="noreferrer noopener">IRS form 1040</a>.<br><br>Follow these simple instructions for common Form 1099-NEC:</p>



<ol>
<li>On form 1099-NEC, locate box 1; this is the amount you received from the payer.</li>



<li>Since form 1099-NEC documents money you received as a non-employee, you could either list it in line 3 (business income) or line 8z (other income) of Form 1040, Schedule 1.</li>



<li>Add the amount from box 1 on form 1099-NEC to your chosen line on Form 1040, Schedule 1.&nbsp;</li>
</ol>



<p>On Form 1040, Schedule 1, you should find a line that corresponds to each type of 1099 form — for example, if you receive a 1099-C (because you settled credit card debt), you can enter the amount in box 1 of the 1099-C in line 8c (cancellation of debt).&nbsp;&nbsp;</p>



<h2>Frequently Asked Questions About IRS Form 1099</h2>



<h3>What Should I Do if There’s a Mistake on My 1099?</h3>



<p>If there’s a mistake on your 1099, you have a few options:</p>



<ul>
<li><strong>Contact the payer</strong> – If the payer made a mistake, reach out to them. They can send you a corrected version when filing your tax return.&nbsp;</li>
</ul>



<ul>
<li><strong>Contact the IRS</strong> – If you don’t receive a 1099 (or a corrected one) by the end of February, contact the IRS. The IRS will contact the payer on your behalf and provide instructions on filing your tax return if you don’t receive your 1099 or corrected form by the tax filing deadline.&nbsp;</li>
</ul>



<h3>What’s the Difference Between a 1099 and a W-2?</h3>



<p>Businesses issue W-2s to employees whose income tax they withhold from their paychecks. After withholding these funds, businesses pay them to the IRS on their employees’ behalf.&nbsp;</p>



<p>If you receive a 1099, however, no one withheld any taxes from your payment; the form tells you the amount of income that could be taxable.&nbsp;</p>



<h3>Do I Need a 1099?</h3>



<p>Each 1099 form has its own requirements. For example, you only need to complete a 1099-NEC for an individual to whom you paid more than $600. But, if you’re a financial institution, you need to send an individual a 1099-INT if they made at least $10 in interest on their account. </p>



<h2>Simplify Your Tax Filing with 1-800Accountant</h2>



<p>Whether you're a small business owner or a contract worker, getting your taxes and 1099s right can be challenging. That's where <a class="link" href="https://1800accountant.com/">1-800Accountant</a> comes in. Even the most complex tax situations are a cinch with our experts by your side. From easy-to-understand <a class="link" href="https://1800accountant.com/services/bookkeeping">bookkeeping</a> to <a class="link" href="https://1800accountant.com/services/payroll">affordable payroll</a> to <a class="link" href="https://1800accountant.com/services/income-taxes">personal income tax preparation</a>, we have you covered.</p>

There are many reasons why you might require a 1099 form this year, whether you&#8217;re a contractor, a new business owner, or an established small business. If this is your first time or you haven&#8217;t needed this form in a while, use this blog to learn about what a Form 1099 is, its utility, your [&hellip;]

A workspace with a computer, 1099 tax forms, and a notebook, featuring the question "what is a 1099 tax form?" in bold text.

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What Is a 1099 Tax Form?

<p>As a small business owner, you'll have questions about your business, business procedures, and taxes. You may have entity-specific or business tax questions, making receiving the correct answers urgently.</p>



<p>When tax season arrives, small business owners will have questions but only a little time to receive proper answers, assistance, and next steps. Here are answers to small business tax questions that small business owners are asking.</p>



<h2>Top 10 Small Business Tax Questions</h2>



<p>Here are the top 10 questions and answers to common tax questions that small business owners have:</p>



<h3>1. Can I Use Scanned Copies of Receipts for Tax Purposes?&nbsp;</h3>



<p>Scanned copies of receipts are okay to save and submit for tax purposes, and the IRS allows this as long as your receipts are identical to the original receipts. Your scanned receipts should also contain identical information to your original copies.</p>



<p>If you experience a tax audit but have scanned copies of your receipts, you'll want to save these records. With an audit, the IRS may require you to submit paper copies of your scanned receipts.</p>



<h3>2. How Do Taxes Work with a Small Business?</h3>



<p>Small businesses will<a class="link" href="https://www.sba.gov/business-guide/launch-your-business/choose-business-structure" target="_blank" rel="noreferrer noopener"> file and pay</a> their taxes based on their business entity. Businesses can choose their tax year when they file taxes for the first time.</p>



<p>Federally:</p>



<ul>
<li>Corporations pay income tax on their profits, and their shareholders pay personal income tax from the corporation's dividends.</li>



<li>Partnerships and sole proprietorships pay personal income tax and self-employment taxes.</li>



<li>S corporations pay taxes as pass-through entities, and their shareholders pay personal income tax.</li>



<li>Sole proprietors pay both personal taxes and self-employment taxes.</li>



<li>Multiple-member LLCs can elect to pay taxes as a corporation, partnership, or S corp. Single-member LLCs can pay taxes as sole proprietors.</li>
</ul>



<p>Depending on where you operate your business, your business may also have local and state taxes. If so, you may also have to pay employment taxes and state income taxes.</p>



<h3>3. How Much Can a Small Business Make Before Having To Pay Taxes?</h3>



<p>A small business's exact amount before paying taxes depends on its entity. Corporations can use Form 1120 to determine how much they'll pay in taxes.</p>



<p>Other business entities, such as LLCs, partnerships, S Corporations, and sole proprietorships, have different considerations for determining their income. These entities require their business owners to report income on their personal income tax returns, which means you'll have both business and nonbusiness income on your tax return.</p>



<p>Independent contractors and sole proprietors will have to pay taxes if they earn $400 or more.&nbsp;</p>



<h3>4. What Business Expenses Can You Claim On Taxes?</h3>



<p>The IRS <a class="link" href="https://www.thebalancemoney.com/deductible-business-expenses-3192959" target="_blank" rel="noreferrer noopener">has two requirements</a> for what business owners can claim as their business expenses.&nbsp;</p>



<p>Business expenses must be both ordinary and necessary. Ordinary expenses are expenses similar businesses or trades commonly pay for, and necessary expenses assist you in doing your business.</p>



<p>You can claim considerable business expenses as tax deductions:</p>



<ul>
<li>Advertising</li>



<li>Automobile expenses&nbsp;</li>



<li>Entertainment and meal expenses&nbsp;</li>



<li>Maintenance and repairs</li>



<li>Home office expenses&nbsp;</li>



<li>Transportation expenses</li>
</ul>



<h3>5. What Information Does a Small Business Need For Taxes?</h3>



<p>Small businesses will need several documents to file their <a class="link" href="https://1800accountant.com/services/small-business-taxes">small business taxes</a>. These documents include the following:</p>



<ul>
<li>Business assets and business expense information</li>



<li>Financial statement</li>



<li>Home office expenses for business owners using their home as their primary business site.</li>



<li>Vehicle use information if you’re seeking a tax deduction for business vehicles.</li>
</ul>



<h3>6. What Is The Easiest Way To Pay Estimated Taxes?</h3>



<p>The easiest way to pay estimated taxes is to use the Electronic Federal Tax Payment System (EFTPS). Businesses and individuals can use EFTPS to make estimated tax payments weekly, bi-weekly, monthly, or on a different schedule.</p>



<h3>7. What Is The Penalty For Not Paying Quarterly Taxes?</h3>



<p>The penalty for not paying quarterly taxes is 0.5% of the amount not paid for each month or part of the month that the quarterly tax remains unpaid. There's a maximum penalty of 25% for not paying quarterly taxes.</p>



<h3>8. What Will Trigger an IRS Audit?</h3>



<p>Although IRS audits are infrequent, there are red flags that <a class="link" href="https://aofund.org/resource/top-10-irs-audit-triggers-and-what-do-if-audited/" target="_blank" rel="noreferrer noopener">trigger an audit</a>. Small businesses may experience an IRS audit for:</p>



<ol>
<li>Undergoing significant changes in business expenses and business income.</li>



<li>Filing an incomplete tax return.</li>



<li>File a tax return with errors.</li>



<li>Mixing business expenses with personal expenses.</li>



<li>Not making a business profit for several years.</li>



<li>Not filing a tax return if a business experiences a financial loss.</li>



<li>Operating a business that deals with a lot of cash.</li>
</ol>



<h3>9. Which Receipts Can I Claim on My Taxes?</h3>



<p>As you collect your <a class="link" href="https://www.irs.gov/businesses/small-businesses-self-employed/what-kind-of-records-should-i-keep" target="_blank" rel="noreferrer noopener">business receipts</a> throughout the year, it may become difficult to know which receipts to keep for taxes.</p>



<p>&nbsp;You can claim receipts related to the following:</p>



<ul>
<li>Expenses&nbsp;</li>



<li>Gross receipts&nbsp;</li>



<li>Purchases</li>
</ul>



<p>Receipts related to expenses will show costs your business incurs other than purchases. You can claim expense receipts, including:</p>



<ul>
<li>Account statements</li>



<li>Canceled checks</li>



<li>Cash register tape receipts</li>



<li>Credit card receipts and statements</li>



<li>Invoices</li>
</ul>



<p>There are additional receipts related to business expenses that you should keep to claim as a tax deduction. The IRS requires you to prove these expenses to claim entertainment, gifts, transportation, and travel.&nbsp;</p>



<p>Gross receipts are another receipt type you can claim on your taxes. You can claim gross receipts, including:</p>



<ul>
<li>Cash register tapes</li>



<li>Deposit information&nbsp;</li>



<li>Form 1099-MISC</li>



<li>Receipt books</li>



<li>Invoices</li>
</ul>



<p>Purchases are the last receipt type that you can claim on taxes. You may use information from your purchases to claim credits or deductions on your tax return from:&nbsp;</p>



<ul>
<li>Canceled checks</li>



<li>Cash register tape receipts&nbsp;</li>



<li>Credit card receipts and statements</li>



<li>Invoices</li>
</ul>



<h3>10. Who Has To Pay Quarterly Taxes?</h3>



<p>There are three groups of people who have to make <a class="link" href="https://1800accountant.com/services/quarterly-estimated-taxes">quarterly tax payments</a>:&nbsp;</p>



<ol>
<li>Corporations</li>



<li>People without enough tax withheld&nbsp;</li>



<li>Self-employed workers</li>
</ol>



<p>Corporations may need to pay quarterly taxes if they expect to owe at least $500.</p>



<p>Second, if you need more taxes withheld, you should make quarterly tax payments. There are two criteria the IRS has for who needs to pay quarterly taxes for those not withholding enough taxes, and you'll need to meet both requirements to pay quarterly taxes in this group.</p>



<p>The first criterion is that you'll owe at least $1,000 in federal taxes after adding your tax credits and withholding. The second criterion is that your refundable credits and withholding cover the following:</p>



<ul>
<li>Less than 90% of your tax liability for the current year</li>



<li>100% of your liability for last year</li>



<li>110% for taxpayers with an adjusted gross income of $150,000 for taxpayers filing individually, or $75,000 for taxpayers who are married and filing jointly</li>
</ul>



<p>Third, self-employed workers, including freelancers and independent contractors, should pay their quarterly taxes if they owe $1,000 or more in taxes.</p>



<h3>Work with Expert Accountants To Help Navigate Small Business Taxes&nbsp;&nbsp;</h3>



<p>Small business taxes encompass different requirements for different entities. Federal, local, and state tax requirements and multiple business entities make it critical to get your small business questions answered.<br>When you need to answer small business tax questions, it's best to work with experts. Work with the expert accountants at <a class="link" href="https://1800accountant.com/services/business-tax-advisory">1-800Accountant</a> for your small business tax needs.</p>

As a small business owner, you&#8217;ll have questions about your business, business procedures, and taxes. You may have entity-specific or business tax questions, making receiving the correct answers urgently. When tax season arrives, small business owners will have questions but only a little time to receive proper answers, assistance, and next steps. Here are answers [&hellip;]

Text overlay reading "common tax questions from small business owners" on a background of scattered paper slips with tax-related terms.

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10 Common Small Business Tax Questions Owners Are Asking

<p>Being self-employed brings with it a lot of independence. You get to make your own choices and set your own hours. You work when you want to work!</p><p>But for better or for worse, that independence also means a lot more responsibility. You’re operating your own small business, and as a result, you’re responsible for your own <a class="link" href="https://1800accountant.com/services/industry/freelancer-self-employed">income taxes and self-employed deductions</a> in a way most working people aren’t.</p><p>If you’ve never paid or filed taxes as a small business owner before, there is a lot you should know before you get started. There are numerous ways you can bring down your overall taxable income and increase the money you get to take home. If you’re not taking advantage of these tax deductions for self-employed expenses, you'll be paying more than you should.</p><h2 class="wp-block-heading">Eliminated or Changed Write-offs for Self-employed Individuals from the Tax Cuts and Jobs Act&nbsp;&nbsp;</h2><p>Small business taxes can be extra complicated because of how frequently the laws change. The tax code can vary significantly from one year to the next, meaning you have to relearn everything all over again.&nbsp;</p><p>The 2017 Tax Cuts and Jobs Act changed a lot about small businesses; many deductions and credits were adjusted or removed entirely.&nbsp;</p><p>Here are a few <a class="link" href="https://www.investopedia.com/tax-deductions-that-are-going-away-4582165" target="_blank" rel="noreferrer noopener">tax deductions that changed or went away because of the TCJA</a>.&nbsp;</p><ul><li>Personal and dependent exemptions are suspended.&nbsp;</li><li>The standard deduction was increased significantly.</li><li>The child tax credit was increased.</li><li>Deductions for commuting expenses are more limited.</li><li>Job relocation moving expenses are no longer deductible except for active-duty military personnel.&nbsp;</li><li>Alimony expenses are no longer deductible and receiving alimony payments no longer counts as taxable income.&nbsp;</li></ul><h2 class="wp-block-heading">10 Self-Employment Tax Write-Offs to Use</h2><p>Here are ten valuable write-offs of business expenses for self-employed individuals you should include on your <a class="link" href="https://1800accountant.com/blog/small-business-tax-deductions-checklist">small business tax deductions checklist</a>.&nbsp;</p><h3 class="wp-block-heading">1. Qualified Business Income Deduction</h3><p>Every year, small businesses below a certain income level can deduct 20% of their qualified business income. QBI refers to your net income but excludes income related to capital gains, interest, or income earned outside the United States.&nbsp;&nbsp;&nbsp;</p><h3 class="wp-block-heading">2. Self-Employment Tax Deduction</h3><p>As a self-employed individual, you have to pay a higher percentage of your income into Social Security and Medicare, for a total of 15.3%. However, you can claim a deduction for half of that. 7.65% of your self-employment tax can be claimed as a business expense and not counted for your taxable income.&nbsp;</p><h3 class="wp-block-heading">3. Home Office Deduction</h3><p>Another significant source of savings is the <a class="link" href="https://1800accountant.com/blog/home-office-deduction">home office deduction</a>. However, simply working from home isn’t enough to claim this deduction. You must have a dedicated space in your home that is only used for your business, and it has to be a primary site for your work.&nbsp;</p><p>If you’re eligible for this deduction, you can claim a portion of all your home-related costs as business expenses. You can deduct a portion of your rent or mortgage and other important home repair costs in proportion to the space of your home office. All of that is in addition to the costs of any office supplies or goods you use exclusively for work.&nbsp;</p><h3 class="wp-block-heading">4. Health Insurance Premium Deduction</h3><p>If you’re not eligible for health insurance through your spouse, you can also count your health insurance premiums as a business expense. Effectively you are your own employer paying for your employee’s health insurance, so that cost should be paid with pre-tax income.&nbsp;</p><h3 class="wp-block-heading">5. Vehicle Use Deduction</h3><p>Do you frequently use your vehicle for business purposes? Commuting costs don’t count here, but other work-related travel costs can be deducted, either for a company car or your own personal vehicle.&nbsp;</p><p>To claim this deduction, you can either keep detailed records of your vehicle expenses or simply log the miles traveled for business purposes. The IRS has established a <a class="link" href="https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2023-business-use-increases-3-cents-per-mile" target="_blank" rel="noreferrer noopener">standard mileage rate</a> for tax purposes, and in 2023, most businesses can claim a deduction of 65.5 cents per mile for business, medical, charitable, or moving-related travel.</p><h3 class="wp-block-heading">6. Internet and Phone Bills Deduction</h3><p>How much do you spend on internet and phone bills? These may also be deductible expenses as far as they’re used for your business. For a home office or a personal phone that you also use for business costs, you can deduct a fraction of the total cost based on an estimate of your relative business use.</p><p>On the other hand, you might have a separate phone used only for work or even a separate internet subscription. In that case, you can deduct the full cost of those bills as necessary expenses for your business.&nbsp;&nbsp;</p><h3 class="wp-block-heading">7. Meals Deduction</h3><p>Under certain specific circumstances, you can deduct all or part of the costs related to meals or entertainment purchased as part of your work. If you take clients out for meals or bring food to your workplace to share with others, then those costs are 50% deductible.&nbsp;</p><p>There are also a few meal-related costs that can be fully deducted. To be 100% deductible, it must be food or entertainment provided as part of a party for the entire company at once, or it must be something officially included as compensation for your employees for whatever purpose.&nbsp;</p><h3 class="wp-block-heading">8. Retirement Plan Contributions</h3><p>Every year you’re permitted to deduct a significant amount of money for payments you make directly into your retirement plan. This allows you to defer paying taxes on that income until you withdraw that money later.&nbsp;</p><p>It would be wise to max out your deductible retirement contributions before the end of each year, especially if you’re likely to find yourself in a higher income tax bracket.&nbsp;</p><h3 class="wp-block-heading">9. Interest</h3><p>While the principal on many loans can’t be deducted, you can deduct the interest on loans, including your home mortgage, even if you don’t have a home office.</p><h3 class="wp-block-heading">10. Education</h3><p>The IRS sees continuing education as a regular and necessary part of the job. Any money you spend to help you do your job better or keep up with industry developments is money you can deduct for education expenses.&nbsp;</p><p>This also covers any fees you pay for professional publications or association memberships.&nbsp;</p><h2 class="wp-block-heading">Maximize Your Tax Savings With 1-800Accountant</h2><p>It takes serious dedication and know-how to efficiently utilize the tools available to reduce your taxable income and final tax bill.</p><p>It might seem overwhelming, but it doesn't have to be with 1-800Accountant in your corner. Let our <a class="link" href="https://1800accountant.com/services/small-business-taxes">experts handle your taxes</a> while you dedicate time and resources to growing your business. You’ll be able to rest easy knowing America's leading virtual accounting firm isn't leaving potential savings behind.</p>

Being self-employed brings with it a lot of independence. You get to make your own choices and set your own hours. You work when you want to work! But for better or for worse, that independence also means a lot more responsibility. You’re operating your own small business, and as a result, you’re responsible for [&hellip;]

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Top 10 Tax Write-Offs for Self-Employed Individuals

<p><a class="link" href="https://1800accountant.com/blog/prepare-file-small-business-tax-return">Filing taxes for your business</a> is essential to your responsibilities as a small business owner, but it can be complicated, especially if you're not prepared. One thing leads to another, and you can fall further and further behind on your taxes. </p>



<p>Even if you're past the due date for your tax return, it's not too late to file a return for back taxes. The more significant challenge will be figuring out how to file back taxes without records.&nbsp;</p>



<p>Preparing your tax return will be difficult if you don't have a complete accounting of your finances. How can you pay what you owe if you don't know much income you've received? Fortunately, you have options. Read on to learn how to file back taxes without records and the importance of doing so.&nbsp;</p>



<h2>Why You Should File Back Taxes for Your Small Business</h2>



<p>There are many good reasons to file your income tax returns, even if you are far beyond the deadline. Even late, it’s worth the effort to avoid what happens if you <a class="link" href="https://1800accountant.com/blog/what-happens-if-you-dont-file-taxes">don’t file business taxes</a>. </p>



<p>If you don't file a return, the IRS will eventually file a substitute return based on their data to estimate what you owe. Likely, they won't include every benefit and deduction you're eligible for. You will also surrender any possible tax refunds if you don’t file a return.&nbsp;</p>



<p>There is also a failure to file penalty fine. If you have unpaid taxes, that amount will grow every month you continue without filing a late return for up to five months afterward. </p>



<p>It’s worth figuring out how to catch up on unfiled taxes to claim those deductions and receive your refund. <a class="link" href="https://1800accountant.com/services/small-business-taxes">Filing your small business taxes</a> also helps you be sure you've paid everything you owe, no matter how late you file. Unpaid taxes will rack up significant fines over time, and the IRS will eventually act to collect them on their own if you don't pay.</p>



<h2>How Many Years Back Can You File Delinquent Taxes?</h2>



<p>The IRS will accept all past-due tax returns. However, if you want to claim a tax refund or credit, you must file your return within three years of the original deadline. <a class="link" href="https://www.irs.gov/businesses/small-businesses-self-employed/filing-past-due-tax-returns" target="_blank" rel="noreferrer noopener">Filing past-due tax returns</a> are less valuable if you go further back than that.&nbsp;</p>



<p>You should file past taxes for at least the last three years to claim any benefits you left behind, ideally up to the previous six years. How many years you can file back taxes may also depend on the data you still have from those years.&nbsp;</p>



<h2>How To File Back Taxes Without Records </h2>



<p>You may wonder, "Can I file my back taxes?" The answer is yes, but you might not want to do it alone, especially when you don't have significant records to reference. You can file back taxes just like any other 1040 tax return.&nbsp;&nbsp;&nbsp;</p>



<p>The IRS will accept your past-due federal tax returns as soon as you submit them. For state tax issues, you should look up your individual state's policies or speak to an <a class="link" href="https://1800accountant.com/services/business-tax-advisory">accounting professional</a>.&nbsp;</p>



<p>If you don't have a good record of your finances over the period in question, however, it will be more challenging to figure out your tax bill. Here’s how to get started:</p>



<h3>Collect Financial Records</h3>



<p>To file your return, the first thing you need to do to get started is to collect all the financial data you can find on the tax years in question. You may not have consistent or reliable bookkeeping, but there must be some clues or records you can refer to that will help you assess your tax liability.&nbsp;</p>



<p>These are some of the most common sources you might be able to use to put together your past-due tax return:&nbsp;</p>



<ul>
<li>Bank account and credit card statements</li>



<li>Tax forms like W-2s and Social Security statements</li>



<li>Receipts from business expenses</li>



<li>Old emails or paper records of transactions</li>
</ul>



<h3>Requesting Tax Transcripts</h3>



<p>You might not find enough information to go in your records alone. Fortunately, the IRS also holds various records and forms for at least three years. You can request IRS tax transcripts with form 4506-T to <a class="link" href="https://www.irs.gov/individuals/get-transcript" target="_blank" rel="noreferrer noopener">get your tax record</a>.&nbsp;</p>



<p>There are a few distinct kinds of tax transcript you may be able to request:&nbsp;</p>



<ul>
<li>Transcripts of tax returns you submitted in a prior year</li>



<li>A report on your basic filing status and taxable income according to IRS records</li>



<li>A wage and income transcript brings together 1099s, W-2s, and any other relevant paperwork the IRS has received from other businesses or financial institutions</li>
</ul>



<h3>Work with Forensic Accounting Experts</h3>



<p>If you’re struggling and still don’t know how to file back taxes without W-2s or other records, you may need to contract with a tax professional or a team with specialties in forensic accounting. Forensic accounting specializes in investigating and reconstructing business activity without regular records.&nbsp;</p>



<p>You want to be sure you get your tax returns done right, so you want to work with people who know how to put the data together, maximize your savings, and get it done right to <a class="link" href="https://1800accountant.com/services/audit-defense">defend you from a potential audit</a>.&nbsp;</p>



<h2>How 1-800Accountant Can Help With Your Delinquent Business Taxes</h2>



<p>If you’re trying to figure out how to file back taxes without records, you may need tax preparation help from the experts. Find an accountant you can trust who can help file back taxes for your company and get you back on track with your bookkeeping for the future.&nbsp;</p>



<p>1-800 Accountant is standing by to support your company with professional <a class="link" href="https://1800accountant.com/services/business-tax-advisory">small business tax advisory services</a>. If you’re behind, don’t hesitate to get help now and get the situation under control.&nbsp;&nbsp;</p>

Filing taxes for your business is essential to your responsibilities as a small business owner, but it can be complicated, especially if you&#8217;re not prepared. One thing leads to another, and you can fall further and further behind on your taxes. Even if you&#8217;re past the due date for your tax return, it&#8217;s not too [&hellip;]

Young man reviewing and calculating his business finances.

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How to File Back Taxes Without Records For Your Small Business

<p>Tax liability is something that affects all small businesses. For small businesses, several factors play into tax liability, such as business entity type, due dates, and specific taxes owed.</p><p>Small businesses can reduce their tax liability by implementing tax-saving strategies. There are ways to save money for yourself and your employees for almost every business entity. Continue reading to learn more about how to reduce tax liability as a small business owner.</p><h2>What Is Business Tax Liability?</h2><p>Small business tax liability is <a class="link" href="https://www.sba.gov/business-guide/manage-your-business/pay-taxes" target="_blank" rel="noreferrer noopener">the tax owed</a> on your business income, and your business entity type determines your tax liability at the federal and state levels.&nbsp;</p><p>Federally, all businesses will pay taxes based on their business entity. Some federal payments require payments throughout the year. You may also have federal tax payment requirements if your small business has employees. However, for those businesses functioning as pass-through entities, the tax liability is carried by the S Corporation shareholder or by the partner in a partnership at the federal level. State rules can differ for business entities.&nbsp;</p><p>Your tax liability can be for employment and income taxes at the state level. Your business entity will also determine your tax liability for state taxes. For businesses with employees, you can expect to pay different taxes.&nbsp;</p><p>Although this differs by state, you can expect to pay these business state taxes:</p><ul><li>Temporary disability insurance</li><li>Unemployment insurance tax</li><li>Workers’ compensation insurance</li></ul><h2>Different Types of Business Taxes?</h2><p><a class="link" href="https://www.usa.gov/small-business" target="_blank" rel="noreferrer noopener">Many business taxes</a> apply to small businesses:</p><ul><li>Employment tax</li><li>Estimated tax</li><li>Excise tax&nbsp;</li><li>Income tax</li><li>Property tax</li><li>Sales and use tax</li><li>Self-employment tax&nbsp;</li></ul><p>Employment taxes apply to employers who have employees. There are four employment taxes:&nbsp;</p><ul><li>Federal income tax withholding</li><li>Federal unemployment insurance tax (FUTA)&nbsp;</li><li>State unemployment insurance tax (SUI)</li><li>Medicare and Social Security taxes</li></ul><p><a class="link" href="https://1800accountant.com/services/quarterly-estimated-taxes">Estimated taxes</a> are another business tax from income not subject to tax withholding. You can pay estimated taxes if you don't withhold taxes voluntarily.&nbsp;</p><p>Estimated taxes include income from:&nbsp;</p><ul><li>Dividends</li><li>Interest&nbsp;</li><li>Self-employment</li></ul><p>Excise taxes are taxes you'll pay for using certain goods or services. You’ll pay excise taxes if your small business:&nbsp;</p><ul><li>Manufactures or sells certain products</li><li>Operates certain kinds of businesses&nbsp;</li><li>Receives payment for specific services</li><li>Uses various types of equipment, facilities, or products</li></ul><p>Income tax is another business tax. Most business entities will pay federal income tax, except partnerships. Instead, those individuals within a partnership will report their profits and losses on their individual tax returns.</p><p>States also charge income tax on businesses. Not every state charges businesses income tax, so this portion of income tax can vary depending on where your small business operates.</p><p>Property tax is a business tax that affects business owners. States have different categories on which properties are taxable.&nbsp;</p><p>Some states collect property tax for businesses based in commercial real estate locations. Other states can collect property tax based on the following, which are referred to as tangible personal property taxes:&nbsp;</p><ul><li>Business assets&nbsp;</li><li>Business vehicles</li><li>Computer equipment</li></ul><p>Sales and use tax is another tax that states may charge small businesses taxes for their use of goods and services whenever sales taxes aren't collected.&nbsp;</p><ul><li>When this occurs, it may apply to goods and services purchased out of state.&nbsp;</li><li>There are exclusions to what states can charge sales tax, including food, medicine, and utilities.</li></ul><p>Self-employment tax is the last business tax that business owners may be subject to, which applies to those who own their business.&nbsp;</p><h2>4 Ways To Reduce Small Business Tax Liability&nbsp;</h2><p>There are four ways to reduce the tax burden for <a class="link" href="https://www.thebalancemoney.com/ways-to-save-on-business-taxes-397610" target="_blank" rel="noreferrer noopener">small business owners</a>:</p><h3>Set Up and Fund Your Retirement Plan</h3><p>The first way to reduce taxable income is to set up a retirement plan. Small business owners can set up a retirement plan for themselves and their employees if their business entity has employees.</p><p>If you set your retirement plan as a qualified plan, you may qualify for additional tax savings.&nbsp;</p><h3>Qualified Busines Income Tax Deduction</h3><p>The second way to reduce taxable income is to use the Qualified Business Income Tax Deduction. The Qualified Business Income Tax deduction allows three pass-through business entities to deduct 20% of their qualifying business income:&nbsp;</p><ul><li>A partnership</li><li>A sole proprietorship</li><li>An S Corporation</li></ul><p>You can claim this deduction on top of claiming other business tax deductions, and you can claim this deduction whether you’re a single filer or if you’re married and filing jointly. For most businesses, there are income limits for this deduction.</p><h3>Take Tax Credits</h3><p>The third way to reduce the taxes you owe is to take tax credits. Small businesses may qualify for various business tax credits related to:&nbsp;</p><ul><li>Hiring employees</li><li>Providing health coverage to employees</li><li>The environment</li><li>Work opportunities&nbsp;</li></ul><h3>Tax Deductions</h3><p>The fourth way small businesses can reduce their taxes is by using<a class="link" href="https://1800accountant.com/blog/small-business-tax-deductions-checklist"> tax deductions</a>. There are deductions beyond The Qualified Business Income deduction, which can help your small business and its tax liability. These deductions apply to:</p><ul><li>Business equipment</li><li>Real estate</li><li>Machinery</li><li>Vehicles</li></ul><p>Working with <a class="link" href="https://1800accountant.com/blog/hiring-tax-professional-small-business">a tax professional</a> will help you know which tax credits and deductions you qualify for.</p><h2>When Are Business Taxes Due?</h2><p>Business taxes have <a class="link" href="https://www.irs.gov/faqs/small-business-self-employed-other-business/starting-or-ending-a-business/starting-or-ending-a-business-3" target="_blank" rel="noreferrer noopener">different due dates</a> based on the type of business entity and when its year ends.&nbsp;</p><ul><li><strong>C corporations</strong> can choose a fiscal year-end date</li><li><strong>Partnerships</strong> mostly use the calendar year for business tax payments</li><li><strong>S corporations</strong> use the calendar year to establish their due date</li></ul><h3>Business Entity Due Dates</h3><div class="rte-table-container"><table><thead><tr class="table-data-container"><td class="cell-0">Business Entity</td><td class="cell-0">Tax Return Due Date</td></tr></thead><tbody><tr class="table-data-container"><td>Corporations</td><td>April 15</td></tr><tr class="table-data-container"><td>Partnerships</td><td>March 15</td></tr><tr class="table-data-container"><td>S Corporations</td><td>March 15</td></tr><tr class="table-data-container"><td>Single-member LLCs</td><td>April 15</td></tr><tr class="table-data-container"><td>Sole Proprietorships</td><td>April 15</td></tr></tbody></table></div><p>Please note that for single-member LLCs and sole proprietorships, the due date aligns with the individual tax filing due date (Form 1040).</p><h3>LLCs Filing As Due Dates</h3><p>LLCs with multiple members can elect to pay business taxes as a corporation, partnership, or S Corporation, which presents three due date options depending on the chosen entity type:&nbsp;</p><div class="rte-table-container"><table><thead><tr class="table-data-container"><td class="cell-0">LLC Filing Type</td><td class="cell-0">Tax Return Due Date</td></tr></thead><tbody><tr class="table-data-container"><td>LLC filing as a Partnership</td><td>March 15</td></tr><tr class="table-data-container"><td>LLC filing as a Corporation</td><td>April 15</td></tr><tr class="table-data-container"><td>LLC filing as an S corp</td><td>March 15</td></tr></tbody></table></div><h3>Quarterly Estimated Tax Due Dates</h3><p>If you’re subject to estimated taxes, there are additional deadlines. Estimated taxes are due quarterly on:&nbsp;</p><div class="rte-table-container"><table><thead><tr class="table-data-container"><td class="cell-0">Payment Period</td><td class="cell-0">Estimated Tax Due Date</td></tr></thead><tbody><tr class="table-data-container"><td>January 1 - March 31</td><td>April 15</td></tr><tr class="table-data-container"><td>April 1 - May 31</td><td>June 15</td></tr><tr class="table-data-container"><td>June 1 - August 31</td><td>September 15</td></tr><tr class="table-data-container"><td>September 1 - December 31</td><td>January 15</td></tr></tbody></table></div><p>However, in practice, estimated tax payments are credited when paid.</p><h2>Reduce Your Tax Liability by Partnering With an Expert</h2><p>Determining your tax liability can help you, your employees, and your small business. Given how many variables there are to determine tax liability, you’ll want to work with tax professionals.</p><p>Small business owners may have several taxes to pay, but you have options available. When you need help with small business taxes, you’ll want to ensure you get the help you need. Work with the <a class="link" href="https://1800accountant.com/services/small-business-taxes">small business tax accountants</a> at 1-800Accountant for your small business tax needs.</p>

Tax liability is something that affects all small businesses. For small businesses, several factors play into tax liability, such as business entity type, due dates, and specific taxes owed. Small businesses can reduce their tax liability by implementing tax-saving strategies. There are ways to save money for yourself and your employees for almost every business [&hellip;]

One hundred dollar bills laying on top small business tax forms as the business owner ponders how to reduce their tax liability.

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How To Reduce Tax Liability For Small Businesses

<p>Influencers are tastemakers who shape what their dedicated audiences will embrace or avoid. In some industries, an influencer's word can mean much more than a celebrity spokesperson or a famous athlete, which isn't lost on companies engaged in a tight battle for consumer dollars.<br><br>The influx of money, access, and power to this emerging industry has turned hobbyists into professionals overnight. Whether it's what they signed up for or not, influencing can be a real business that comes with real responsibilities. And if you shirk those responsibilities related to your income or aren't proactive about it, IRS penalties and scrutiny could follow.<br><br>Whether you're an established influencer or a hobbyist aspiring to become one, use this guide for influencer taxes to help you with filing taxes as an influencer during the upcoming tax season.&nbsp;</p>



<h2>Do Influencers Pay Taxes?</h2>



<p>If you're earning money from your efforts as an influencer, <a class="link" href="https://1800accountant.com/blog/influencer-accounting">you must pay taxes</a> on that income.&nbsp;<br>Like other professions, the amount of money you make will dictate how you file with the IRS.<br><br>Influencers typically work for themselves, so they are subject to a self-employment tax (SE tax) and an income tax. If you're an influencer making more than $600 per year, you must file Form 1099-NEC with the IRS. If you're making below that amount, you can file a Form 1040 with the IRS on your income tax return.&nbsp;<br></p>



<p>Remember that this is related to the money you bring in, not gifts or product samples you might receive. However, there are instances where you might have to report gifts and samples to the IRS.</p>



<h2>Do Influencers Pay Taxes on Gifts?</h2>



<p>Influencers regularly receive product samples and review materials from companies that wish to make inroads with a particular audience. The IRS views these materials as "gifts" on which you might have to pay taxes.</p>



<p>When a brand gifts a product and the value exceeds $100, you must include that in your tax filing to the IRS. If the total value of the product is less than $100, you do not need to declare this when filing your taxes. </p>



<p>It's important that influencers keep detailed records of every gift received and its value to avoid, this will help avoid stress during tax season. Remember brands often do not disclose the value of their gifts, and it's up to the influencer to declare during tax season. </p>



<h2>Do Influencers Need an LLC?</h2>



<p>Whether you need an LLC or not depends on timing. If you're starting and haven't cleared the $600 income threshold yet, it's best to wait.<br></p>



<p>But if the income from your influencer business is growing, it might be time to seriously consider making your business official by forming an LLC. But there are several different business entities for influencers to consider.&nbsp;</p>



<h2>What are the Different Influencer Business Entities?</h2>



<p>There are three main business entities influencers should consider forming as:</p>



<ul>
<li>Sole proprietorship</li>



<li>Independent contractor</li>



<li>LLC</li>
</ul>



<h3>Sole Proprietorship</h3>



<p>A sole proprietor is a self-employed individual who owns and operates a business. Influencers who form a sole proprietorship file their taxes using their personal income tax return and social security number.&nbsp;</p>



<p>Influencers will use <a class="link" href="https://www.irs.gov/forms-pubs/about-schedule-c-form-1040" target="_blank" rel="noreferrer noopener">Form 1040 and the Schedule C</a> supplement to disclose income and losses from their businesses.<br></p>



<h3>Independent Contractor</h3>



<p>There are similarities between sole proprietorships and independent contractors, with an important distinction. Independent contractors work for others on a contractual basis. Doctors and lawyers often operate as independent contractors, and influencers certainly can too.<br><br>The businesses influencers collaborate with will send a Form 1099 at the end of the fiscal year. This form will illustrate the exact amount of money you made that year working with that business or brand.&nbsp;</p>



<h3>LLC</h3>



<p>Forming as an LLC introduces influencers to a more formal business entity registered with their state.&nbsp;</p>



<p>Influencers who form an LLC enjoy simplicity and flexibility in taxing and protecting their personal assets, shielding them from business liabilities.<br><br>Once they form an LLC, Influencers will have 75 days to select a different business structure for their new company, such as an S corporation. They can also opt to stay as an LLC.&nbsp;&nbsp;</p>



<h2>Top five influencer tax write-offs</h2>



<p>There are several tax deductions influencers may be able to utilize. Some of the most popular deductions for influencers include:&nbsp;</p>



<h3>Work Phone</h3>



<p>Your phone bill is partially deductible if you're using it for work activities. Itemize work calls on your bill and provide a brief explanation of each charge.&nbsp;</p>



<h3>Office Supplies</h3>



<p>Stationery, photocopies, monitors, and more are tax deductible if used for business-related purposes.&nbsp;</p>



<h3>Business Website</h3>



<p>Your business's website hosting fee and associated assets, such as stock photos or a web theme, are tax-deductible.</p>



<h3>Advertising</h3>



<p>Your budget for ads, such as those found on social media and in search results, is tax-deductible for your business.</p>



<h3>Internet Access</h3>



<p>Accessing the internet is essential to most influencers' jobs, and you can write that recurring bill off.&nbsp;</p>



<h2>Work with experts that specialize in influencer taxes.</h2>



<p><a class="link" href="https://1800accountant.com/services/industry/freelancer-self-employed">Influencer accounting</a> can be complicated, and choosing the right path to keep the most money in your pocket can be agonizing. That's why so many influencers decide to work with 1-800Accountant, America's leading virtual accounting firm for small business owners just like you. Our team of experts who specialize in working with influencers in your state will provide <a class="link" href="https://1800accountant.com/services/business-tax-advisory">periodic advisory</a> and a year-round strategy to maximize your tax savings. Working with 1-800Accoutant allows you to continue influencing while we handle the rest. All it takes is a quick call to get started!</p>

Influencers are tastemakers who shape what their dedicated audiences will embrace or avoid. In some industries, an influencer&#8217;s word can mean much more than a celebrity spokesperson or a famous athlete, which isn&#8217;t lost on companies engaged in a tight battle for consumer dollars. The influx of money, access, and power to this emerging industry [&hellip;]

Young man creating a video for his influencer business.

Influencer-Taxes-Everything-You-Need-to-Know

Influencer Taxes: Everything You Need to Know to Navigate Tax Season

<span style="font-weight: 400;">There are more ways to be a </span><span style="font-weight: 400;">self-employed personal trainer</span><span style="font-weight: 400;"> today than ever. You could be a </span><span style="font-weight: 400;">traveling personal trainer</span><span style="font-weight: 400;">, coach, or contractor for a larger fitness organization or even offer online training services!</span>

<span style="font-weight: 400;">Whatever your work looks like, you've put in tremendous time, money, and labor to make that work possible. When you're working for yourself, there's no one else but you to set up the structure and support your work.</span>

<span style="font-weight: 400;">Fortunately, there are </span><span style="font-weight: 400;">tax deductions for fitness professionals</span><span style="font-weight: 400;"> that will recognize your massive effort and expense. Explore this guide to </span><span style="font-weight: 400;">personal trainer tax deductions</span><span style="font-weight: 400;"> and ensure you get the tax savings you're eligible for.</span>
<h2><span style="font-weight: 400;">Can I Deduct Personal Trainer Expenses</span><span style="font-weight: 400;">?</span><b> </b></h2>
<span style="font-weight: 400;">You can deduct business expenses from your taxable income as a self-employed personal trainer, which is a crucial part of your </span><span style="font-weight: 400;">personal trainer taxes</span><span style="font-weight: 400;">. Money used to support your business shouldn't count as taxable profit. </span>

<span style="font-weight: 400;">Consider working with a professional if you’re concerned about deductions or you’ve never done your taxes before. The stakes are high, and you may </span><a class="link" href="https://1800accountant.com/blog/reasons-you-need-accountant-self-employment"><span style="font-weight: 400;">need an accountant to help you with your self-employed tax return</span></a><span style="font-weight: 400;"> before </span><span style="font-weight: 400;">tax time</span><span style="font-weight: 400;"> arrives.   </span>
<h2><span style="font-weight: 400;">5 Deductions You Can Claim as a Personal Trainer or Fitness Coach</span></h2>
<span style="font-weight: 400;">You can claim deductions for many of the costs of doing business as a personal trainer or fitness coach. Here are a few of the significant </span><span style="font-weight: 400;">tax deductions for personal trainers</span><span style="font-weight: 400;"> you can take advantage of:</span>
<h3><span style="font-weight: 400;">1. Exercise Equipment and Supplies</span></h3>
<span style="font-weight: 400;">Personal trainers often work with their clients using various equipment, from hand weights to treadmills and elliptical machines. If you purchase this equipment for your small business on your own, you should claim a tax deduction for it. </span>

<span style="font-weight: 400;">If you see clients in a training room, you should be able to write off any </span><span style="font-weight: 400;">personal training</span><span style="font-weight: 400;"> equipment costs incurred as business expenses. However, you can’t deduct expenses for your home gym if you don’t use it for a business-related purpose.</span>
<h3><span style="font-weight: 400;">2. Certification &amp; Education Costs</span></h3>
<span style="font-weight: 400;">Personal trainers</span><span style="font-weight: 400;"> can deduct all expenses for required licensing and continuing education, including obtaining official certificates or maintaining your expertise. </span>

<span style="font-weight: 400;">You can deduct expenses for business-related books, supplies, and subscriptions to fitness websites, publications, or journals relevant to your field. Plus, you can deduct specific membership fees if you belong to a professional association.</span>
<h3><span style="font-weight: 400;">3. Office Costs</span></h3>
<span style="font-weight: 400;">Where do you conduct your work? If you rent a gym or </span><span style="font-weight: 400;">office space</span><span style="font-weight: 400;">, all costs associated with that space can be claimed as </span><span style="font-weight: 400;">deductions on your taxes</span><span style="font-weight: 400;">. </span>

<span style="font-weight: 400;">If you keep a </span><span style="font-weight: 400;">home office</span><span style="font-weight: 400;"> where you </span><span style="font-weight: 400;">train clients</span><span style="font-weight: 400;"> in your own space, you can claim a corresponding portion of your home rent and utility costs, assuming that the home office space is used exclusively for business purposes.</span>

<span style="font-weight: 400;">Other varied office-related expenses are also deductible, including anything from paper and staplers to printer ink and accounting software.</span>
<h3><span style="font-weight: 400;">4. Travel Expenses</span></h3>
<span style="font-weight: 400;">If you travel to seminars, conferences, or events for personal trainers, you can claim your travel and hotel costs as part of your personal </span><span style="font-weight: 400;">trainer tax deductions</span><span style="font-weight: 400;">. </span>

<span style="font-weight: 400;">When traveling out of town for work or driving long distances to </span><span style="font-weight: 400;">training sessions</span><span style="font-weight: 400;">, you can also write off mileage on your personal vehicle. When you write off mileage, you can either add up actual vehicle expenses or </span><a class="link" href="https://www.irs.gov/tax-professionals/standard-mileage-rates" target="_blank" rel="noopener"><span style="font-weight: 400;">use the standard mileage rate set by the IRS</span></a><span style="font-weight: 400;">. </span>
<h3><span style="font-weight: 400;">5. Liability &amp; Health Insurance Premiums</span></h3>
<span style="font-weight: 400;">Tax deductions for athletic coaches</span><span style="font-weight: 400;"> and trainers include insurance. If you pay your liability insurance, that's a tax-deductible expense. Self-employed trainers can also claim </span><span style="font-weight: 400;">health insurance</span><span style="font-weight: 400;"> premiums as business expenses. </span>

<span style="font-weight: 400;">You can also deduct uninsured </span><span style="font-weight: 400;">medical expense</span><span style="font-weight: 400;">s, but they're not business expenses, which means you can only claim them if you're itemizing your personal deductions.</span>
<h2><span style="font-weight: 400;">What Else Qualifies as Tax-Deductible Expenses?</span></h2>
<span style="font-weight: 400;">What can I deduct from my taxes</span><span style="font-weight: 400;"> for my </span><span style="font-weight: 400;">fitness business</span><span style="font-weight: 400;">? You should be able to claim deductions for nearly any </span><span style="font-weight: 400;">business expense</span><span style="font-weight: 400;"> you can justify as being necessary for your work. However, this only applies to your </span><span style="font-weight: 400;">self-employed personal trainer taxes</span><span style="font-weight: 400;">. If you are a W-2 employee, you can only claim personal deductions if you are itemizing your deductions. </span>
<h2><span style="font-weight: 400;">How to Claim </span><span style="font-weight: 400;">Personal Trainer Tax Deductions</span></h2>
<span style="font-weight: 400;">As you </span><a class="link" href="https://1800accountant.com/blog/how-to-file-taxes-independent-contractor"><span style="font-weight: 400;">prepare to file taxes as an independent contractor</span></a><span style="font-weight: 400;">, keeping careful records of your </span><span style="font-weight: 400;">income and expenses</span><span style="font-weight: 400;"> is the most important thing. You need receipts testifying to the business expenses you'll be claiming. </span>

<span style="font-weight: 400;">You'll fill out your 1040 personal tax return as usual, and here you can claim the standard deduction or itemize your personal deductions. Then you'll move on to </span><a class="link" href="https://www.irs.gov/forms-pubs/about-schedule-c-form-1040" target="_blank" rel="noopener"><span style="font-weight: 400;">IRS 1040 Schedule C, Profit or Loss from Business</span></a><span style="font-weight: 400;">, which is the form you'll use to report your personal business income and deductions. Your business expenses count as losses associated with that business.   </span>

<span style="font-weight: 400;">Don’t hesitate to seek help from an accountant as you work on putting together your small business tax return. </span>
<h3><span style="font-weight: 400;">How We Can Help You Maximize Your Tax Deductions</span></h3>
<span style="font-weight: 400;">For more <a class="link" href="https://1800accountant.com/services/small-business-taxes">help with your small business taxes</a> and finding personal trainer tax deductions, turn to the accounting experts at 1-800Accountant. Whether you're a small business owner or a self-employed individual working on your <a class="link" href="https://1800accountant.com/services/industry/freelancer-self-employed">personal trainer tax return</a>, we can help you keep more of the money you work hard to make.</span>

There are more ways to be a self-employed personal trainer today than ever. You could be a traveling personal trainer, coach, or contractor for a larger fitness organization or even offer online training services! Whatever your work looks like, you&#8217;ve put in tremendous time, money, and labor to make that work possible. When you&#8217;re working [&hellip;]

Young woman performing a back squat with her personal trainer there for support.

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Getting Financially Fit: Top 5 Personal Trainer Tax Deductions

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