You can escape the rat race!
What you can’t escape is filing taxes. Yes, even digital nomads and other freedom-seeking freelancers must file taxes. The IRS even created a special form especially for people like you.
On the blog today we’re talking about how to file 1099, the form for workers on the move.
Why Do I Need to File Form 1099?
The funny thing about Form 1099-MISC—it’s not you that files the form.
The one who files the form is the business or individual who paid at least $600 for your services. That said, you do need to file your taxes. You heard it here first!
Since you travel, you’re wondering how you find your 1099, right?
Like W2s for employees, payers must mail your 1099-MISC by the end of January for the preceding tax reporting year. If you have a mail forwarding service, check your mail.
We live in the digital age, however, and many businesses and accountants send the forms electronically.
By the way, all payers must copy the IRS on the 1099 form.
Know Before You File
Before you get excited about filing taxes, make sure you’re filing the correct tax forms. If you’re not sure whether you qualify for the 1099-MISC, ask yourself this question:
Do I get a stub that looks anything like the ones found on paystubcreator.net?
If, yes, then maybe you don’t get a 1099. Or, maybe you get both a W2 and a 1099 at the end of the year.
How to File 1099 the Right Way
Filing your 1099 isn’t difficult, it’s different.
Regular employees who receive a W2, usually file taxes with IRS Form 1040. You, on the other hand, will report the information from your 1099 on Schedule C (also created by the IRS).
Digital nomads love Schedule C. It’s their symbol of freedom. It’s also where they claim deductions for business expenses.
This is where many 1099 filers get confused. How do you know how the IRS views your unique expenses?
Those Tricky Business Expenses
While we’re not tax accountants and can’t advise what you should and shouldn’t calculate as a business expense, this is how the IRS views expenses:
An expense incurred by other self-employed people in the same (or similar) line of work.
Example: You write a travel blog. You can usually deduct travel expenses like airfare, hotel, and meals. You can also deduct your internet, office supplies, and shipping costs.
These are expenses that help you complete your work.
Example: You’re a photographer. You can deduct the cost of equipment and photo-editing software.
We won’t list every business expense here. The IRS offers a comprehensive explanation of business expenses. Check it out on their website.
Ready to File Taxes?
We hope we’ve unraveled some of the mystery about how to file 1099.
Most freelancers can handle filing taxes on their own. If you prefer travel over paperwork, you can always make friends with an accountant.
If you enjoyed this post, continue browsing our blog. You’ll find a wide range of articles of interest to digital nomads and freelancers.
Heal Yourself: Exploring the Types of Regenerative Therapy
Did you know that almost 80% of funding for stem cell research comes from the federal government? The government provides…
The Top RV Designs to Inspire You in 2022
According to one study, 11 million families in America own an RV. if you’re interested in also owning your own…