West Virginia born and bred
Joined:
Dec 2022
Posts:
8925
EE: 100% (2)
WV, USA
Posted: 11/6/2025 8:18:08 AM EDT
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Guys, I’m jumping into a consulting business for the old company I worked for, and retired from last year. They asked if I’d do some P/T work for them. I have my business license. I’ve set up an account with my bank for the business. I’ve checked with my health insurance provider. I know what SS allows me to earn before penalties. My question is what can I use as tax deductions for this business? What receipts do I need to keep? Gas Car milage Food Work tools/laptop Are these even deductible anymore? I’m trying to keep this business simple, just working for this one company on an “as needed” basis. |
Montani Semper Liberi
Deuteronomy 31:6 ~ Be strong and courageous. Do not fear or be in dread of them, for it is the Lord your God who goes with you. He will not leave you or forsake you.”
Deuteronomy 31:6 ~ Be strong and courageous. Do not fear or be in dread of them, for it is the Lord your God who goes with you. He will not leave you or forsake you.”
| I can't help with deductions, but (if you're not already aware) I'd suggest becoming a part-time, on-call employee of the company vs a 1099 where you'll get taxed at a much higher rate. Generally, if you work under 30hrs a week they are protected from offering benefits and Obama care. One other thought, keep tabs on your total earnings for the Medicare income related monthly adjusted amount. I think it's only $78 a month, but it's your $78 they're after. |
President, Quantico Shooting Club where we shoot 1,000yds every Sunday!
Back the Blue
Back the Blue
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If they are paying your business via 1099 and you file schedule se there’s a lot of potential write offs…. Fraction of your home used only for business can be written off (spare bedroom turned into an office is 5% of the square footage of your house then you can write off 5% of your mortgage, insurance, internet/electricity bill, etc). If you have to drive to a different work location you can write off mileage. Need a uniform or special clothes? Write them off. Buy a computer or office supplies? Write them off. Do you have 35 years of SS taxed income? If not these years will raise your SS retirement benefit so do the math if write offs are a net benefit or not. |
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Originally Posted By Hillbilly62: Guys, I’m jumping into a consulting business for the old company I worked for, and retired from last year. They asked if I’d do some P/T work for them. I have my business license. I’ve set up an account with my bank for the business. I’ve checked with my health insurance provider. I know what SS allows me to earn before penalties. My question is what can I use as tax deductions for this business? What receipts do I need to keep? Gas Car milage Food Work tools/laptop Are these even deductible anymore? I’m trying to keep this business simple, just working for this one company on an “as needed” basis. What am i missing? LOTS. I agree with keeping it simple but you will need to build a depth of knowledge. Reason being, you WILL get burned by regulations, filings, audits, loss of classifications or dead revenue. Example: Gas/Car Mileage: you cannot do both. It's 1 or the other. Home office deduction? "#1 red flag audit material". To the point when we were running a full 2 person business from home, we didn't deduct our home office for 3 years, too much liability and not worth the $100. health insurance gets sticky with part time versus full time and requirements. The bullshoot "everyone has a business. everyone is a CEO" is exactly that. 18 months most of those folks realize the level of effort it takes behind the scenes. They usually fade back to W-2 employment or other, nothing wrong with that. It's not hard but just EFFORT to make it look easy. Most of the time folks ask me "I'm going to start my own firm". My reply "Don't." Educate yourself on the basics. If you are going to give it a go, you must become a businessman in addition to your technical skillset. Attached File |
West Virginia born and bred
Joined:
Dec 2022
Posts:
8930
EE: 100% (2)
WV, USA
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Thanks for the info guys. This is strictly company resources, help is needed because corporate will not allow them to hire a new employee. Working through a second vendor for payment as a work around. Which has been approved. No home office, no other employees. I’m going to do it for the next 1-1/2 months and determine if I want to pursue it into 2026. I retired for a reason. I worked 15 years in the shipyard, then 24 years with this company but I have a good friend there that has asked me for help. |
Montani Semper Liberi
Deuteronomy 31:6 ~ Be strong and courageous. Do not fear or be in dread of them, for it is the Lord your God who goes with you. He will not leave you or forsake you.”
Deuteronomy 31:6 ~ Be strong and courageous. Do not fear or be in dread of them, for it is the Lord your God who goes with you. He will not leave you or forsake you.”
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Originally Posted By Hillbilly62: Working through a second vendor for payment as a work around. Huge difference in tax situations depending on that answer. Sounds like you’re already getting SS? If so, I don’t know all the details, but add up the implications first. Between making more of your SS taxable, Irmaa, and other things I don’t know about you might be giving up a big chunk of your paycheck to Uncle Sam. If so it may not be worth the hassle. |
West Virginia born and bred
Joined:
Dec 2022
Posts:
9012
EE: 100% (2)
WV, USA
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Originally Posted By Morgan321: Will you get paid via w2 or 1099? Huge difference in tax situations depending on that answer. Sounds like you’re already getting SS? If so, I don’t know all the details, but add up the implications first. Between making more of your SS taxable, Irmaa, and other things I don’t know about you might be giving up a big chunk of your paycheck to Uncle Sam. If so it may not be worth the hassle. It will be 1099. |
Montani Semper Liberi
Deuteronomy 31:6 ~ Be strong and courageous. Do not fear or be in dread of them, for it is the Lord your God who goes with you. He will not leave you or forsake you.”
Deuteronomy 31:6 ~ Be strong and courageous. Do not fear or be in dread of them, for it is the Lord your God who goes with you. He will not leave you or forsake you.”
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Originally Posted By Hillbilly62: It will be 1099. Anytime you do 1099 work you need to make sure it's well worth your time because you're often paying 40% tax depending on your other income and how much state taxes you pay. But it opens up lots of write-offs. Mileage to the work location or home office square footage(to include mortgage, utility bills, home insurance, internet service, etc) can be deducted, work clothes/equipment (do you need a computer? printer? pencils? phone? tools?), and tons more things. The mileage alone can add up fast if you're driving to work - $0.70 per mile! Also these deductions are not itemized on your personal tax return, they are tallied up on your schedule C when you file as a sole proprietorship business. The profit(or loss) is carried onto your 1040 and adds to (or subtracts from) your other income. So if you make $5k but have $10k of business expenses you get $5k subtracted from your other income on your 1040. You're only allowed to have a net loss for 2 or 3 years in a 5 year period. When I was young I wrote for car magazines on the side and got paid via 1099 for many years. The schedule C and SE are trivially easy forms, don't let them scare you. Be honest about your write offs and keep the receipts and it's a big nothing burger. |
