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🧾 Day 13: What to Know About 1099-NEC & Contractors: A Simple Guide for Businesses and Freelancers In today’s flexible work landscape, hiring independent contractors can be a smart move—offering agility without the long-term commitments of traditional employment. But with this freedom comes responsibility, especially when it’s time to tackle tax forms like the 1099-NEC . Let’s break down what you need to know about using this form and working with contractors, without the tax jargon overload. 📌 What Is the 1099-NEC? The 1099-NEC (Nonemployee Compensation) is an IRS form used to report payments made to nonemployees for services. It replaced the old use of Form 1099-MISC for service payments starting in 2020 . You’ll need to issue this form if you paid: $600 or more in the calendar year To an individual or business not classified as an employee For services (not products or rent) Who is not incorporated—i.e., a sole proprietor or LLC taxed as such It goes to both t...

 📅 Day 12: Quarterly Taxes – A Simple Payment Plan Guide If you're self-employed or running a side business, quarterly taxes can feel like a ticking clock. Unlike traditional employees, you’re expected to pay taxes as you earn , four times a year. But what happens when cash flow is tight, deadlines sneak up, or life just gets in the way? That’s where a simple payment plan strategy can turn stress into structure. 🎯 Who Needs Quarterly Payments? If you expect to owe $1,000 or more in federal income tax (after subtracting withholdings and credits), the IRS wants you to pay quarterly: April 15 June 15 September 15 January 15 of the following year This includes gig workers, freelancers, small business owners, and even side hustlers with no employer withholding. 💡 Building a Simple Payment Plan (Not the IRS One—Your Own!) Here’s a low-stress method to set aside taxes ahead of each deadline: Step 1: Estimate Your Annual Tax Liability Use last year’s return as a baseline...

What I Liked as a Kid — And What That Says About Me Now “What did you like when you were a kid?” That’s what my son asked me recently. He’s still in elementary school, full of curiosity and surprising wisdom. I paused—surprised more by the question's depth than by my own lack of an immediate answer. I didn’t grow up with a standout talent. No trophies for piano recitals. No natural athletic streak. No artistic flair that turned heads. But what I did like was being good at school. Not because it came easily. Not because I was naturally gifted. But because I could earn it. Good grades didn’t need money or privilege or brilliance—they needed focus, consistency, and quiet determination. That was something I could cultivate, even when everything else felt outside my control. School was my structure. My safety net. My validation. It was how I built self-worth when support systems were limited and resources were scarce. It showed me that effort could translate into progress—and that becam...

 📆 Day 11: The Home Office Deduction — Who Really Qualifies? In today's increasingly remote landscape, the home office deduction has gained more attention than ever. But while many dream of writing off their cozy corner desk and coffee machine, the IRS has pretty clear boundaries on who actually qualifies. Let’s break it down with precision, so you know where you stand and what’s deductible. 🏡 What Is the Home Office Deduction? The home office deduction lets self-employed individuals claim business use of part of their home, potentially reducing their taxable income. It’s a legitimate tax benefit designed to support those running their own operations—from freelancers and consultants to Etsy shop owners and digital product creators. Note: W-2 employees generally cannot claim this deduction, even if working remotely for an employer. ✅ Who Qualifies? To qualify, your home office must meet two key criteria : Exclusive and Regular Use The space must be used solely for busin...

 📁 Day 10: How to Organize Receipts Without Stress Small habits, big peace of mind. Receipts are tiny pieces of paper with enormous potential for overwhelm. Whether you're tracking expenses for tax season, managing a side hustle, or just trying to stay on top of your budget, an unorganized pile can quickly feel like a personal nemesis. Today’s goal is simple: turn receipt chaos into calm with a system that honors your structured and minimalist nature. 🌿 Why Receipt Organization Matters Reduces anxiety over tax deadlines or budgeting surprises Saves time when preparing reports or reconciling expenses Supports financial clarity , especially for business owners and freelancers 🛠️ Step-by-Step: Creating Your Receipt System 1. Choose Your Format—Digital or Physical Select a method that aligns with how you naturally operate: Digital : Scan receipts using apps like Adobe Scan or Microsoft Lens. Save them to cloud storage (e.g., Google Drive, OneDrive) in labeled folders by...

 📆 Day 9: Common Mistakes First-Time Filers Make Avoid These Tax Pitfalls & File with Confidence Filing your taxes as a first-time business owner feels like stepping into a maze of deadlines, forms, and deductions. But don’t worry—many of the mistakes new filers make are easy to avoid once you know what to look out for. Here’s a breakdown of the most common missteps and how to sidestep them. ❌ Mistake #1: Mixing Business & Personal Expenses It’s tempting to swipe one card for everything—but it clouds your financials. ✅ Solution : Open a dedicated business bank account and only use it for business transactions. Clean books mean easier deductions and fewer audit risks. ❌ Mistake #2: Forgetting Quarterly Estimated Taxes Waiting until April can cause sticker shock—and penalties. ✅ Solution : If you expect to owe more than $1,000 in taxes, mark your calendar for quarterly payments (April, June, September, January). Use IRS Form 1040-ES or talk to a CPA to set your ta...

💡 Should You Elect PTET for Your S-Corp? Pass-Through Entity Tax (PTET) is a strategic state-level workaround to bypass the $10,000 SALT deduction cap on your federal return. It lets your S-Corp pay state income tax at the entity level , turning a limited personal deduction into a full business expense. Here's how to evaluate if it’s right for you: ✅ Step-by-Step PTET Decision Checklist ❓ Question ✔️ Consider This Does your state allow PTET? Over 30 states offer PTET elections—check your state rules. Do you owe significant state income taxes? PTET is most valuable if your state tax exceeds $10,000. Are all shareholders residents of the state? Nonresident shareholders may disqualify or complicate election. Does your business qualify (not SSTB)? Some states or new laws may exclude service-based entities. Are you set up for entity-level payments? You must file, pay, and record PTET correctly through the S-Corp. Are you ready to track PTET credits? Owners receive credits o...

What the “Big Beautiful Bill” Means for Your Taxes President Trump’s newly signed “Big Beautiful Bill” is more than a political headline—it’s a sweeping tax overhaul that reshapes how Americans earn, save, and file. Whether you’re a W-2 employee, business owner, or retiree, here’s what you need to know about the tax-wise changes coming your way. 📉 1. Permanent Extension of 2017 Tax Cuts The bill locks in the lower tax rates from the 2017 Tax Cuts and Jobs Act (TCJA), which were previously set to expire in 2025. That means: Lower individual income tax rates remain in place Higher standard deductions are now permanent Expanded child tax credit continues beyond 2025 This move is expected to save high-income households tens of thousands over time, while middle-income families see modest relief. 💰 2. No Tax on Tips and Overtime (With Limits) One of the most talked-about provisions: tips and overtime pay are now partially tax-exempt . Up to $25,000 in tips and $12,500 in o...

 💼 Should You Pay Yourself a Salary? (For LLC/S-Corp Owners) Navigating how to compensate yourself as a business owner isn’t just about getting paid—it’s about staying compliant, managing taxes, and protecting your financial future. If you’re an LLC taxed as an S-Corporation, paying yourself a reasonable salary isn’t optional—it’s required. Let’s unpack why, when, and how to pay yourself a salary the right way. 🧐 What Does "Reasonable Salary" Mean? The IRS expects S-Corp owners who perform substantial work for the business to pay themselves a “reasonable” wage. That means: Comparable Pay : Your compensation should be similar to what someone else would earn doing your job. Fair for Workload : Consider the time, effort, and responsibilities you take on. Backed by Evidence : You may need to support your salary with industry data or job listings. 💡 Pro tip: Documenting your rationale—like hours worked, roles performed, and industry benchmarks—can save you trouble du...

  Day 7 – How to Hire Your Kid Legally — And Save Taxes Hiring your child might sound like a sentimental idea, but it’s actually a strategic tax-saving move —if done right. The IRS allows business owners to hire their minor children under certain conditions, offering both tax deductions for your business and income tax benefits for your child . Here's how to make it work legally and efficiently. ✅ Why Hire Your Child? 1. Your Business Gets a Deduction Wages paid to your child are a legitimate business expense. That means your business income (and tax liability) goes down. 2. Your Child May Owe Zero Taxes As of 2025, a child can earn up to $14,600 (the standard deduction) without paying any federal income tax— as long as it’s earned income (i.e., wages, not gifts or allowances). 3. No Payroll Taxes for Some Businesses If your business is a sole proprietorship or a partnership where both partners are the child’s parents , and your child is under 18 , then: No Social S...

  📅 Day 6: What’s Actually Deductible When You Eat Out for Business (2025 Edition) Business meals can be a legit tax deduction — but only if you follow the rules. And no, your solo sushi craving doesn’t count (unless your client’s name is “Tax Return”). Let’s break it down. 🍽️ What Counts as a Deductible Business Meal? In 2025, most business meals are 50% deductible , but some are 100% . Here’s how to tell the difference: ✅ 50% Deductible Meals with clients or prospects (as long as business is discussed and you’re present) Meals while traveling for business Team lunches or working meals (not lavish) ✅ 100% Deductible Company-wide events (like holiday parties) Meals provided for the employer’s convenience (e.g., working late at the office) Promotional events open to the public (like a launch party with snacks) 🚫 Not Deductible Entertainment (concerts, sports games — even if business is discussed) Meals that are overly extravagant Personal meals or groceries 🧾...