Frequently Asked Questions

Yes. If you earn $400 or more in self-employment income during the year, you're required to file a tax return and pay self-employment tax. This applies even if you have another job where you receive a W-2.

You'll report your freelance income on Schedule C and pay both income tax and self-employment tax (Social Security and Medicare).

W-2 income is from traditional employment where your employer withholds taxes from each paycheck. You receive a W-2 form at the end of the year.

1099 income is from self-employment, freelancing, or contract work where taxes aren't withheld. You receive a 1099-NEC (or 1099-K for payment platforms) showing your earnings.

The key difference: With 1099 income, you're responsible for paying all taxes yourself, including the full 15.3% self-employment tax.

Quarterly estimated tax payments are due four times per year:

• Q1: April 15 (for income earned January 1 - March 31)
• Q2: June 15 (for income earned April 1 - May 31)
• Q3: September 15 (for income earned June 1 - August 31)
• Q4: January 15 of the following year (for income earned September 1 - December 31)

Missing these deadlines can result in penalties and interest charges.

Self-employment tax is the Social Security and Medicare tax for self-employed individuals. The rate is 15.3% (12.4% for Social Security + 2.9% for Medicare) on 92.35% of your net earnings.

This is in addition to your regular income tax. The good news? You can deduct half of your self-employment tax when calculating your adjusted gross income.

As a general rule, set aside 25-30% of your gross income for federal taxes, and an additional 5-10% for state taxes (if applicable).

The exact amount depends on:

• Your total income level
• Your deductions
• Your filing status
• Whether you have other income sources

We recommend using our quarterly tax calculator to get a more precise estimate for your situation.

You can deduct any expense that is ordinary and necessary for your business. Common deductions include:

• Vehicle expenses (mileage or actual expenses)
• Home office (if you have a dedicated space)
• Equipment and supplies
• Software and subscriptions
• Phone and internet (business portion)
• Professional development and education
• Marketing and advertising
• Health insurance premiums
• Business insurance
• Professional services (legal, accounting)
• Business meals (50% deductible)
• Travel expenses

Standard mileage method: Simpler. Just track your business miles and multiply by the IRS rate ($0.70/mile for 2026). Best for newer, fuel-efficient vehicles.

Actual expense method: Track all vehicle expenses (gas, repairs, insurance, depreciation) and deduct the business-use percentage. Best for older vehicles with high maintenance costs.

Once you use the actual expense method for a vehicle, you can't switch back to standard mileage for that same vehicle. Calculate both ways and choose the one that gives you the larger deduction!

Yes, if you have a dedicated space in your home used regularly and exclusively for business. This means:

• You use the space only for business (not a dual-purpose room)
• It's your principal place of business

The simplified method allows you to deduct $5 per square foot (up to 300 sq ft = $1,500 maximum). Alternatively, you can use the regular method to deduct the actual percentage of home expenses.

Keep detailed records of all business expenses including:

• Receipts: For all purchases over $75
• Mileage logs: Date, destination, purpose, and miles driven
• Bank statements: Showing business transactions
• Invoices: For all income received
• Credit card statements: For business purchases

Digital records are acceptable. We recommend using accounting software or apps to track expenses throughout the year.

The IRS recommends keeping tax records for at least 3 years from the date you filed your return. However, we recommend keeping them for 7 years to be safe.

Keep records permanently for:

• Property purchases and sales
• Retirement account contributions
• Business formation documents

Yes! If you use the actual expense method, you can deduct car washes and cleaning supplies as maintenance expenses. If you use the standard mileage method, these costs are already included in the per-mile rate.

You can also deduct:

• Phone mounts and chargers
• Bottled water or snacks for passengers (if you provide them)
• Air fresheners
• Floor mats

Absolutely deductible! Any equipment you purchase for your delivery business is a valid deduction:

• Insulated food bags
• Phone mounts and chargers
• Catering bags and crates
• Thermal bags for grocery delivery
• Flashlights for night deliveries
• Safety gear (reflective vests, etc.)

Yes! Coworking space memberships are fully deductible as office rent. This is a great option if you don't have a dedicated home office or need to meet with clients.

You can deduct the full cost of:

• Monthly or annual membership fees
• Day passes
• Conference room rentals

If you work on multiple platforms (Uber, DoorDash, Upwork, etc.), you'll receive separate 1099 forms from each. Here's how to stay organized:

• Keep a spreadsheet tracking income from each platform
• Download year-end summaries from each app
• Use accounting software to automatically sync with platforms
• Report all income on Schedule C, totaling all sources

The key is consistency—pick a tracking method and stick with it all year.

Absolutely! Software subscriptions directly related to your business are fully deductible. This includes:

• Adobe Creative Cloud
• Microsoft Office 365
• Canva Pro
• Grammarly Premium
• Project management tools (Asana, Trello, etc.)
• Cloud storage (Dropbox, Google Workspace)

We offer transparent, flat-rate pricing with no hidden fees. Our typical packages include:

• Tax Preparation: Starting at $250 for simple returns
• Monthly Bookkeeping: Starting at $150/month
• Quarterly Tax Planning: $500/year (includes 4 quarterly check-ins)
• Full-Service Package: Custom pricing based on complexity

Schedule a free consultation to get an exact quote for your situation.

For tax preparation, we'll need:

• All 1099 forms (1099-NEC, 1099-K, 1099-MISC)
• Records of business expenses (receipts, bank statements)
• Mileage log (if applicable)
• Prior year tax return
• Records of estimated tax payments made
• Any other income documentation (W-2s, investment income, etc.)

We'll provide you with a detailed checklist during your consultation.

Our process is simple and designed for busy freelancers:

• Step 1: Schedule a free 30-minute consultation (video or phone)
• Step 2: We discuss your income sources, expenses, and tax goals
• Step 3: We provide a custom quote and service recommendation
• Step 4: If you decide to work with us, we'll send you a simple onboarding form
• Step 5: We get to work!

No pressure, no obligation. We're here to help you make the best decision for your situation.

Yes! We prepare both federal and state tax returns. We're experienced with:

• Multi-state returns (if you work in multiple states)
• State estimated tax payments
• State-specific deductions and credits
• Local city/county taxes where applicable

Absolutely. We specialize in helping freelancers catch up on unfiled returns and resolve tax issues. We can:

• File past-due returns
• Calculate and minimize penalties
• Set up payment plans with the IRS
• Get you current and compliant
• Create a plan to prevent future issues

The sooner you address it, the better. We've helped hundreds of clients resolve their tax situations with minimal stress.

You should consider hiring an accountant if:

• You're earning more than $50,000 per year from self-employment
• You have multiple income sources
• You're unsure about deductions and want to maximize savings
• You don't have time to track expenses and file taxes yourself
• You've received a notice from the IRS
• You're behind on filing or payments
• You want strategic tax planning for the future

The cost of an accountant is often recouped through tax savings and peace of mind.

Sole Proprietor (default for freelancers):

• ✓ Simple, no setup required
• ✓ Lower administrative burden
• ✗ No liability protection
• ✗ Limited tax planning options

LLC (Limited Liability Company):

• ✓ Personal liability protection
• ✓ More professional appearance
• ✓ Potential tax benefits with S-Corp election
• ✗ More paperwork and fees

Generally, consider forming an LLC when you're earning $60,000+ or have significant liability risk. Schedule a consultation to discuss your specific situation.

For freelancers and gig workers, we recommend:

QuickBooks Self-Employed - Best for most freelancers

• Automatic mileage tracking
• Expense categorization
• Quarterly tax estimates
• Integrates with many platforms

Wave - Best free option

• 100% free for basic features
• Good for simple income tracking
• Receipt scanning included

FreshBooks - Best for client invoicing

• Professional invoicing
• Time tracking
• Project management

We work with all major accounting platforms and can help you get set up.

Highly recommended, but not required for sole proprietors. However, having a separate business account:

• Makes expense tracking much easier
• Provides clear documentation for the IRS
• Simplifies bookkeeping and tax preparation
• Looks more professional to clients
• Protects you in an audit

If you form an LLC, you'll want to keep finances completely separate to maintain liability protection. Many banks offer free business checking accounts for sole proprietors.

The IRS requires a contemporaneous log (tracked in real-time). Best methods:

Automatic tracking apps:

• MileIQ: Automatic detection, easy swipe to categorize
• Everlance: Great for rideshare and delivery drivers
• QuickBooks Self-Employed: Built-in mileage tracking
• Stride: Free app popular with gig workers

Your mileage log should include: date, starting location, destination, business purpose, and miles driven. Apps handle all of this automatically.