- Home
- Industries
- Professional services & independent contractors
Accounting for professionals and freelancers
Consultants, real estate agents, insurance and travel agents, designers, IT contractors and anyone paid on a 1099.
Why 1099 income needs a plan
When nobody withholds tax from your pay, the tax bill arrives all at once unless you plan for it. Self-employed professionals pay income tax plus self-employment tax of 15.3% on net earnings, and the IRS expects quarterly estimated payments in April, June, September and January. Setting the estimates correctly in the first year avoids the penalty and the surprise.
The deductions are real but have to be documented: the home office, mileage, software, phone, professional licenses, continuing education, and health insurance premiums for the self-employed. Many professionals also qualify for the qualified business income deduction, worth up to 20% of business income, depending on their income level and field.
Once profit grows, the structure question comes up. An S corporation can reduce self-employment tax by paying a reasonable salary and taking the rest as distributions, but it adds payroll and a separate return, so it pays off only above a certain level of profit. We run that comparison with your numbers.
What we handle
- Tax returns with Schedule C or the S corporation return, and the owner’s return
- Quarterly estimated payments calculated and scheduled
- Entity setup and the S corporation election when it saves tax
- Simple monthly bookkeeping, or a year-end cleanup from your bank statements
- Self-employed deductions documented: home office, mileage, health insurance premiums
- Health, life and business insurance quotes
“The only place we go to for tax services. We are treated like family and not just another customer. They are professional and do not gate-keep information, in fact, we are educated on all the questions we have for filing and we’ve recommended tons of friends and family to go here. Thank you for taking care of us!”
Questions we hear from this industry
How much should I set aside for taxes?
It depends on your income and deductions. A common rule of thumb is a quarter to a third of net income for federal income and self-employment tax, but a rule of thumb is not a plan. We calculate your actual quarterly estimates so you set aside the right amount, not a guess.
When does an S corporation make sense?
Usually once net profit is comfortably above what a reasonable salary for your work would be, so there is something left to take as distributions. Below that, the extra payroll cost outweighs the savings.
Can I deduct my home office?
If a part of your home is used regularly and exclusively for the business, yes, either by the simplified method or by actual expenses. We help you document it so it holds up.
I’m a real estate agent paid on commission. Anything special?
Agents are usually independent contractors, so estimates, mileage, marketing and licensing costs all apply. Commission income varies a lot month to month, so we revisit the estimates mid-year rather than once.
Tell us what you do
Book a free 15-minute consultation online, or call us today. In person or remote, in English or Spanish.