FREQUENTLY ASKED QUESTIONS

A 1099 form is sent to you by companies or clients who paid you $600 or more as a non-employee (freelancer, gig worker, contractor). Unlike a W2 (regular employee), no taxes are withheld — meaning you're responsible for paying them yourself. This includes federal income tax, state income tax, and self-employment tax.

Self-employment (SE) tax is 15.3% of your net income. It covers Social Security (12.4%) and Medicare (2.9%). Regular employees only pay half because their employer covers the other half — as a self-employed person, you pay both halves. SE Tax = Net Income × 0.9235 × 0.153 Example: $5,000/month × 12 = $60,000 annual. SE tax ≈ $8,478/year.

Most 1099 workers pay 25–30% of net income in total taxes (federal + SE tax). Higher earners pay more: Gig workers: ~25–28% · Freelancers: ~28–32% · Locum doctors: ~35–45% This is why ClickTaxEasy recommends setting aside 27.5% of your net income each month.

If your net self-employment income is less than $400 for the year, you don't owe self-employment tax. However, if you have other income sources that bring your total above the standard filing threshold ($13,850 for single filers in 2024), you still need to file a return.

The IRS standard mileage rate for 2024 is 67¢ per mile driven for business purposes. This covers fuel, maintenance, and depreciation. 10,000 business miles × $0.67 = $6,700 deduction → ~$1,840 tax savings You must keep a mileage log with date, destination, and business purpose. Apps like MileIQ make this easy.

Yes — the business use percentage of your phone bill is deductible. If you use your phone 80% for work, deduct 80% of your bill. $100/month × 80% business use × 12 months = $960/year deduction Keep a record of how you use your phone for business (navigation, client calls, app use).

If you use part of your home exclusively and regularly for business, you can deduct that percentage of rent, utilities, and internet. 150 sq ft office ÷ 1,000 sq ft home = 15% → $1,500/mo rent × 15% × 12 = $2,700/year Important: the space must be used only for work — a kitchen table doesn't qualify.

Business meals with clients, colleagues, or for business purposes are 50% deductible. Keep the receipt and note who you met and what was discussed. Meals while traveling for work are also 50% deductible.

Yes! Under Section 179, you can deduct the full cost of business equipment in the year you buy it — no need to depreciate over several years. This includes laptops, cameras, medical equipment, tools, and more. $2,000 laptop × 27.5% tax rate = $550 tax savings

Yes — 100% of your health insurance premiums are deductible if you're self-employed and not eligible for coverage through a spouse's employer plan. This is one of the most valuable deductions available to 1099 workers.

The IRS requires you to pay taxes 4 times per year instead of once, if you expect to owe more than $1,000. This prevents a huge bill (and penalties) at tax time. 2026 deadlines: Apr 15 · Jun 16 · Sep 15 · Jan 15, 2027

The IRS charges an underpayment penalty — currently about 8% annual rate on the unpaid amount. Missing one quarterly payment on $2,000 owed for ~3 months costs about $40. It's not devastating, but it adds up over a year. ⚠️ Avoid penalties: pay at least 90% of current year's tax, or 100% of last year's tax (safe harbor rule).

The easiest way is through IRS Direct Pay at irs.gov/payments. It's free, instant, and you can pay from any bank account. Select "Estimated Tax" as the payment type and the appropriate tax year. You can also mail a check with Form 1040-ES.

Set aside 25–30% of your net income (income minus deductions) each month. Most gig workers use 27.5% as a safe estimate. $5,000/month income - $500 deductions = $4,500 net × 27.5% = $1,238 set aside Open a separate savings account for taxes to avoid accidentally spending it.

Housing and meal stipends are tax-free IF you maintain a tax home — meaning you have a permanent residence in another city where you have ongoing expenses (rent, mortgage, utilities). ⚠️ If you don't maintain a tax home, ALL stipends become taxable income. This is the most important tax rule for travel nurses. Example: $6,000 agency pay + $2,000 stipend → only $6,000 is taxable if you have a tax home.

Locum doctors have some of the highest deduction opportunities: ✓ Malpractice insurance (often $5,000–50,000/year) · ✓ DEA registration · ✓ State medical licenses · ✓ CME (flights, hotel, registration) · ✓ Medical equipment & supplies · ✓ Medical journals & subscriptions · ✓ White coats/scrubs · ✓ SEP-IRA (up to $66,000/year) At 35–40% effective tax rate, a $10,000 malpractice deduction saves $3,500–4,000 in taxes.

Yes — if you work in multiple states, you generally need to file a non-resident return in each state where you earned income, in addition to your home state return. Most states have a threshold (usually $1,000–$2,000 earned) before you're required to file. Some states (TX, FL, WA, NV) have no income tax, which simplifies things considerably.

Key deductions for private practice therapists: ✓ Malpractice/liability insurance · ✓ Practice management software (SimplePractice, TherapyNotes) · ✓ CEU/continuing education · ✓ Office rent · ✓ Supervision fees · ✓ Professional memberships (APA, NASW) · ✓ HIPAA compliance tools · ✓ Books & journals

Yes. If you earn $600 or more, they'll send you a 1099-NEC. Starting 2024, they also send a 1099-K if you receive $600+ in payments. Important: you owe taxes on ALL income, even if you don't receive a 1099 (under $600). The IRS expects you to self-report.

Yes — two methods: Standard mileage: 67¢/mile (simpler, usually better) · Actual expenses: deduct % of gas, insurance, maintenance, depreciation based on business use You must pick one method and stick with it. Standard mileage is simpler and usually results in a larger deduction for most gig drivers.

All income is combined on one Schedule C on your tax return. You'll receive separate 1099s from each platform but report total self-employment income in one place. ClickTaxEasy lets you track income from all platforms separately so you have a clear record.

Yes — all tips are taxable income, including cash tips. You must report tips to your employer if you receive $20 or more in a month. Your employer withholds taxes on reported tips. If you don't report, the IRS can audit you and assess back taxes plus penalties. ⚠️ The IRS cross-references tip income against national averages for restaurants. Reporting too little raises red flags.

If you're a 1099 worker (not a W2 employee): ✓ Required uniforms (not suitable for everyday wear) · ✓ Non-slip work shoes · ✓ Tools (corkscrews, knives, etc.) · ✓ Transportation to work (if required to travel between locations) Note: W2 employees can no longer deduct unreimbursed work expenses since the 2017 Tax Cuts and Jobs Act.

A SEP-IRA (Simplified Employee Pension) is a retirement account for self-employed people. You can contribute up to 25% of net income, max $66,000/year. Contributions are 100% tax-deductible. $20,000 SEP-IRA contribution × 27.5% tax rate = $5,500 tax savings You save for retirement AND reduce your tax bill at the same time. Best for higher earners ($50K+ net income).

A Health Savings Account (HSA) has a "triple tax advantage": contributions are tax-deductible, growth is tax-free, and withdrawals for medical expenses are tax-free. 2024 limits: $4,150 (individual), $8,300 (family). $4,150 HSA contribution × 27.5% = $1,141 tax savings You must have a high-deductible health plan (HDHP) to contribute to an HSA.

S-Corps make sense when your net profit exceeds $80,000/year. The strategy: pay yourself a reasonable salary (SE tax applies), take the rest as distributions (no SE tax). Potential savings: $5,000–15,000/year. ⚠️ S-Corps have setup costs (~$1,000–2,000), filing fees, and require payroll. Below $80K net, the costs outweigh the benefits. Consult a CPA before electing S-Corp status.