I got a 1099. Now what?
First: don't panic. Second: set aside money for taxes now.
Time
30 min
Cost
Varies
DIY?
Yes
Urgency
Medium
What's probably happening
A 1099 means a company paid you as a contractor, not an employee. No taxes were withheld, so the full amount is on you at tax time.
How urgent is it
Not urgent today, but every month you wait is a month you're not setting money aside. Start now, not in March.
What to do first
Open a separate savings account and move 25-30% of every 1099 payment into it the day it lands. That's your tax money, not your spending money.
Can I handle this myself
Yes, if you're comfortable with basic math and a calculator. Estimate your annual self-employment tax (about 15.3%) plus your regular income tax bracket, then divide by four for quarterly payments.
When to call a professional
Call a tax professional if you have multiple 1099s, business expenses to deduct, or your contractor income is more than a side gig.
What it might cost
Self-employment tax alone is roughly 15.3% of net income, on top of regular federal and state income tax. Budgeting 25-30% of gross is a safe starting point.
What to gather first
Every 1099-NEC or 1099-MISC you received, a log of business expenses and mileage, and last year's tax return if you filed one.
Mistakes to avoid
Spending the full payment like a paycheck, forgetting quarterly estimated payments, and not tracking deductible expenses as they happen.
General educational information, not individualized tax, legal, or financial advice for your situation.
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