Maximizing Tax Deductions: Tips for Filing Your 1099 and Claiming Expenses

[mrshamel3808]

Ok, so I got my 1099 in the mail today and it all makes sense but I'm so confused about what I should do now. I printed out a report of all my income and expenses to cross references with my receipts and mileage logs (I wasn't very good at keeping track of it all so it's one of my resolutions this year to keep good track for 2010). I'm looking at my kit enhancements and am wondering if I put the actual amount I spent out of pocket or the entire amount since I bought all but $3.00 of it with my PC dollars. I'm thinking just what I spent out of pocket?

Also, because I haven't kept very good track of my receipts, should I just file without claiming any deductions this year? Or should I just claim what I have paperwork for? For sure I'll be reporting a loss (without all my expenses input I have almost a $1,000 loss) but my income total was less than $3,500 so I don't knwo if it's even worth the trouble of claiming those deductions. If I am going to claim the deductions I'll probably have an accountant (a family friend) help me through it because I have only ever done a 1040EZ.

Any advice would be GREATLY appreciated!!!!

 

[raebates]

Unless someone here is a tax accountant in their day job, we're not really qualified to answer tax questions. A call to someone you trust might be the best idea.

 

[NooraK]

I agree with talking to a tax professional about the specifics if you have concerns, definitely someone with experience in small business.

One thing to consider: the PC dollars you earned are counted as income on your 1099. You then spent them on supplies you use in your business. What would you do if the PC dollars had just been commission and you spent them the same way?

 

[wcsis]

Yes a tax person is a great idea. You can claim certain percentages of your phone, electric and space used in your home for storing supplies and/or office space. I personally have used those deductions in the past for other business ventures but never did I do my taxes without the help of a professional when making those claimed deductions. I am not tax savvy enough to do anything more than the 1040's.

 

[AnaCash]

Hi there! I can understand your confusion about what to do with your 1099 and how to handle your income and expenses for tax purposes. It's always a good idea to keep track of all your receipts and mileage logs throughout the year to make the process easier come tax time.As for your kit enhancements, you should only report the actual amount you spent out of pocket. Since you used PC dollars to purchase most of it, you don't need to include that in your expenses. And for your deductions, it's always best to claim what you have paperwork for. If you don't have receipts for certain expenses, it may be best to not claim them this year and make a resolution to keep better track for the next tax year.However, if you have a significant loss and you want to claim those deductions, it may be worth seeking the help of an accountant to guide you through the process. They can help ensure that you are claiming the correct deductions and maximizing your tax benefits.I hope this helps! Don't hesitate to reach out to your family friend accountant or contact the IRS for further guidance. Best of luck with your taxes!