December 15, 2025

Common Pitfalls of 1099 Income

🔹 Underestimating Taxes – Self-employed individuals pay both income tax and self-employment tax (Social Security & Medicare). Failing to plan could mean a big bill.

🔹 Missing Quarterly Tax Payments – Unlike W-2 employees, independent workers must make estimated tax payments throughout the year to avoid penalties.

🔹 Overlooking Deductions – Business expenses like home office costs, mileage, and software can reduce taxable income—if properly tracked.

🔹 Mixing Personal & Business Finances – Keeping finances separate simplifies tax filing and protects you in case of an audit.

🔹 No Retirement Planning – Without an employer 401(k), many self-employed individuals miss out on tax-advantaged savings opportunities.

How Welgaard CPAs & Advisors Can Help

At Welgaard CPAs & Advisors, we specialize in guiding freelancers, independent contractors, and small business owners. Here’s how we can help:

✔ Tax Strategy & Compliance – Avoid penalties, maximize deductions, and plan ahead.

✔ Business Structuring – Determine if an LLC or S-Corp is right for you.

✔ Financial Planning – Manage cash flow, budget effectively, and plan for retirement.

✔ Year-Round Support – We’re here beyond tax season to provide ongoing guidance.

Take Control of Your Finances Today

Navigating 1099 income can be complex, but you don’t have to do it alone. Let’s talk! Schedule a consultation with Welgaard CPAs & Advisors today.