This post is directed to more of the professional members of the forum, but the discussion will help everyone.
Last year the majority of my income was from a lighting company in Chicago, I was employed as a freelance technician and worked mainly in their shop. No taxes were taken out of my pay check and instead of receiving a W2 form I received a 1099. If I understand this correctly all of that income is considered “personal business income”, which is taxed significantly higher. I was away at college and my father told me that he would have an accountant look at my taxes for me, I asked him to have her write off the mileage that I had to drive for the job. Unfortunately since my father waited till the last minute the communication wasn’t very good. The accountant told him since I was driving to the same location for this job I was not allowed to write off mileage. This meant that I had no write offs and had to pay a significant amount to the IRS.
I was hoping if someone who has dealt with a situation like this could fill me in. Also for people who have had some freelance or professional experience, could you give suggestions as to how to prevent this kind of situation from happening. I had to learn the hard way and I hope this will prevent any other members from having to deal with this.
Thanks,
Steve
Last year the majority of my income was from a lighting company in Chicago, I was employed as a freelance technician and worked mainly in their shop. No taxes were taken out of my pay check and instead of receiving a W2 form I received a 1099. If I understand this correctly all of that income is considered “personal business income”, which is taxed significantly higher. I was away at college and my father told me that he would have an accountant look at my taxes for me, I asked him to have her write off the mileage that I had to drive for the job. Unfortunately since my father waited till the last minute the communication wasn’t very good. The accountant told him since I was driving to the same location for this job I was not allowed to write off mileage. This meant that I had no write offs and had to pay a significant amount to the IRS.
I was hoping if someone who has dealt with a situation like this could fill me in. Also for people who have had some freelance or professional experience, could you give suggestions as to how to prevent this kind of situation from happening. I had to learn the hard way and I hope this will prevent any other members from having to deal with this.
Thanks,
Steve