I'm No Longer a 1099

[judgediatl2]

Ohio

For years I've been a freelancer (and I've used TurboTax for small business). It always helped get me my max deductions and increased my refund, working out of my home office. I was also paying all my own taxes.

This year year was different.

I was hired by an agency, who employs freelancers, pays their taxes and gives them benefits, and then places them at a job (remotely or on site) where you can work as a contractor there (but as an employee of your company).

When using this year's version of TurboTax, I find that a lot of the old things I used to lean on for deductions don't apply as much. And I got a bigger return when I could claim I was completely, 100% independent.

So my question is, is it normal for me to find less ways to save and deduct, now that I'm an employee of this other company (even though I'm still a freelancer, operating all on my own)?

 

[AlmostThere]

This is a good question to ask your accountant.

 

[PayrollHRGuy]

I find that a lot of the old things I used to lean on for deductions don't apply as much.

Such as?

 

[adjusterjack]

You are now a W-2 employee. All, or most, of your business deductions have flown the coop. You get the standard deduction which is somewhere around $13,000.

If you use your car for work (other than commuting back and forth from home to your assigned work location) you might get a mileage deduction. Don't quote me on that as I haven't looked it up so I don't know if that's gone, too.

 

[LdiJ]

You are now a W-2 employee. All, or most, of your business deductions have flown the coop. You get the standard deduction which is somewhere around $13,000.

If you use your car for work (other than commuting back and forth from home to your assigned work location) you might get a mileage deduction. Don't quote me on that as I haven't looked it up so I don't know if that's gone, too.

The mileage deduction is gone too for employees. Basically the tax changes during the Trump administration wiped out all employee business expenses and most misc expenses. Those changes are due to expire soon but I am sure that alot of them will be put back after expiration.

 

[LdiJ]

Ohio

For years I've been a freelancer (and I've used TurboTax for small business). It always helped get me my max deductions and increased my refund, working out of my home office. I was also paying all my own taxes.

This year year was different.

I was hired by an agency, who employs freelancers, pays their taxes and gives them benefits, and then places them at a job (remotely or on site) where you can work as a contractor there (but as an employee of your company).

When using this year's version of TurboTax, I find that a lot of the old things I used to lean on for deductions don't apply as much. And I got a bigger return when I could claim I was completely, 100% independent.

So my question is, is it normal for me to find less ways to save and deduct, now that I'm an employee of this other company (even though I'm still a freelancer, operating all on my own)?

One thing to consider is that you are no longer paying the employer share of SS and medicare benefits out of your pocket, and the benefits that you are receiving have some value as well. Also, just FYI, the "return" is the document sent to the IRS. Any money you get back is a "refund". If you use the word "return" when you mean "refund" it could cause confusion some where down the line. It is best not to do so.

 

[davew9128]

The mileage deduction is gone too for employees. Basically the tax changes during the Trump administration wiped out all employee business expenses and most misc expenses. Those changes are due to expire soon but I am sure that alot of them will be put back after expiration.

Here's hoping they stay gone. Far and away one of the most abused sections of the tax code. I got tired long ago of reading TC cases where the opinion references the strict substantiation requirements of 274, the taxpayer argues its unfair, and loses handily. Or that some of them even have counsel taking the case knowing full well there is no substantiation...