1099 taxes without the April ambush.

Self-employment tax is the part nobody warns you about

The first year of 1099 work usually goes the same way. Income arrived without withholding, it got spent on living costs, and the return produces a balance that feels impossible — because it is not just income tax. Self-employment tax runs roughly 15.3% of net profit and covers the Social Security and Medicare an employer would otherwise split with you. Add income tax on top and a large share of profit is owed before a single deduction is considered.

Nevada's lack of a state income tax means there is no second notice to warn you, so the problem stays invisible until the federal return is prepared. It compounds when nothing changes for the following year: the balance for last year, the first estimate for this year, and the underpayment penalty all arrive together in April, which is precisely how ordinary self-employed people end up in IRS collections.

The fix is unglamorous and effective. Know your real net profit through the year, pay quarterly against a projection rather than a guess, and claim every legitimate deduction so the profit being taxed is the correct number. That is the whole job, done in the right order.

Getting the deductions right, not aggressive

The deductions that matter for most contractors are boring and large: vehicle use, tools and equipment, supplies, home office, phone and internet at the business percentage, insurance, licenses and permits, platform and processor fees, and self-employed health insurance premiums. Retirement contributions through a SEP-IRA or solo 401(k) can move the number substantially for a profitable year, and the deadlines are later than most people expect.

For drivers, the mileage-versus-actual comparison genuinely matters and should be run rather than assumed — high-mileage, low-payment work often favors the standard rate, while an expensive vehicle with heavy repairs can favor actual costs. Once that choice is made in the first year, it constrains later years, which is a reason to get it right rather than to default.

We do not chase aggressive positions. Inflated deductions on a Schedule C are among the most examined items on an individual return, and a client with an audit is worse off than a client who paid the correct amount. What we do insist on is documentation: contemporaneous mileage records, a business bank account separate from personal spending, and reconciled books, which turn a defensible return into a provable one.

The 1099-K deserves particular care. It reports gross payment volume, so refunds, chargebacks, platform fees, and personal transfers that passed through a business account are all inside that number. Matching the form blindly overstates income; ignoring it invites a notice. Reconciling it and documenting the difference is the correct treatment.

If you are already behind

Unfiled years and an existing balance are routine work here, not a reason to be embarrassed. We pull IRS transcripts to see exactly which years are missing and what has been assessed, file the outstanding returns in order, and then look at penalty abatement and payment options. Kevin is an IRS Authorized Representative (CAF # 0316-73651), so the correspondence and calls come to us.

Going forward, monthly bookkeeping plus a quarterly estimate schedule ends the cycle. Fees are flat and quoted in writing before any work begins, and Goodfella's is 100% virtual — Las Vegas headquartered, serving clients across Nevada, California, Arizona, Utah, and nationwide, entirely by phone, email, and secure upload.