What is the biggest surprise going from W-2 to 1099?

That nothing is withheld. Self-employment tax of 15.3% plus income tax is due quarterly, and most people find out after missing the first payment.

How much of 1099 income should I set aside?

25% to 30% of net profit, not of revenue. Track expenses from day one so the base is profit.

Do I need an accountant when I go 1099?

Not immediately. You need clean records from day one; the preparer question comes in your first tax season, and clean records make that cheap.

Going From W-2 to 1099: What Solo Consultants Underestimate

Ask people who went from a paycheck to 1099 income what they underestimated and the answers repeat. Not the work. The plumbing around the work. Five things, in the order they bite.

1. Nothing is withheld, and the bill comes quarterly

Your first 1099 payment lands whole. It feels like a raise. It is not. Self-employment tax is 15.3% on net profit and income tax stacks on top, and the IRS wants it four times a year once you will owe $1,000 or more. Most people learn this after missing the April payment. The whole system, with the dates.

2. Cash flow is lumpy and you are the buffer

Net-30 becomes net-60. The month you set aside 30% for tax is the month a client pays late. Keep a separate tax account and move the set-aside on the day you are paid, not at quarter end, or it will be spent.

3. Records from day one, or a cleanup in February

The people who say "I'll do it properly this time" are the ones who did not do it the first time. Every deduction you cannot document is gone, and the home office, the laptop, the mileage and the software add up. Capture on the day from the phone; five rules cover the entire job for a one-person business.

4. Your accountant needs a package, not a pile

"Do you just give your accountant a pile of receipts?" No. Eight items, categorised, in February. That is the difference between a $400 return and a $1,200 one, and between a preparer who keeps you and one who says you are too small.

5. The month-end grind is optional

"Excel at 11pm on the last day of the month" is not a law of nature. It is what happens when a month of receipts is done in one sitting. Ten seconds per receipt on the day, five minutes on Sunday, and there is no month end.

Text a receipt. It is in your books.

ClaryBook files what you send under the right Schedule C line, keeps a running quarterly estimate, and hands your accountant a tax package with every receipt attached. $30 a month, 30 days free, no card.

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What people do not regret

Opening the business account on day one. Setting up capture before the first receipt. Paying the first quarterly on time even when it hurt. All three are boring and all three are the reason year two is calm.