The 1099 Surprise No One Wants

How'd you like an unexpected tax bill of like $10k? Yeah, I figured not.

This happens every year, someone comes to us in January and says "I made $70K in 1099 income last year."

And we think to ourselves "Yikes. I hope you got some savings."

 Right, if you earned $70k in 1099 income and didn't withhold anything.... you're in for a rude awakening unfortunately. And if you're asking in January after the year ended.... you're kinda up Schitt's Creek.

• 1099 income means no tax withholding

• You might owe both income tax AND self-employment tax

• A $70K side gig could mean a tax bill of $15K-$20K (ouch!)

It sucks and the year is over all you can do is take your medicine from Uncle Sam. For 2025, sure we can probably do things to bring those taxes down, but that's for later this year. 

Right now, the most important thing is filing your taxes. Oh, and just remember that extensions to file are NOT extensions to pay. Uncle Sam ain't letting you get away with that unfortunately yaknow.

For the next few weeks, start putting money away for those taxes. Maybe it's $100 a paycheck. Maybe it's $500. But just start now. 

And of course be on the lookout for all your 1099s, 1099Bs, your IRA statements, all that fun tax stuff. 

Here's a quick video on common red flags for audits. Make sure to watch the video and avoid these no no's. Thanks! https://www.instagram.com/p/C-ZKFZUNx5Q/