Help Requested: Tax Benefits of 1099 vs W2???

[underwood24]

I earn a vast majority of my pay via W2.  I try to take reduce my taxable income as much as possible via employer-sponsored vehicles (403B, 457, Dependent FSA, Health Care FSA, Roth IRA).

This year I'll be making $2000k as an independent contractor, getting a 1099.

Does this give me additional ways to reduce my taxable income?  Can I place more deductible money in an IRA? Can I start taking different itemized deductions like home office deductions?

[Dr. Mom]

Lots of benefits to 1099 income.  Read Mike Piper's short book:  Independent Contractor, Sole Proprietor, and LLC Taxes Explained in 100 Pages or Less.  It will give you great ideas for deductions specifically start up costs, section 179 deduction, and home office.  You can set up a solo 401k for employer contributions, but if you are already maxing out your 403b you have used your employee contribution amount up.  Your limit on an IRA does not change so if you are already maxing it out you don't get more.

[spiritrider]

In case you haven't read other recent posts on this subject.

Unless, you are making substantial net business profits (>= $400K - $500K+) and/or are not earning the majority of this money from personal services do NOT use an S-Corp in a moonlighting situation.

[jfoxcpacfp]

underwood24 wrote:

This year I’ll be making $2000k as an independent contractor, getting a 1099.

Does this give me additional ways to reduce my taxable income?  Can I place more deductible money in an IRA? Can I start taking different itemized deductions like home office deductions?

Click to expand...

You'll probably have related costs that you can deduct against your income. You should use a competent CPA to prepare your taxes. The fact that you are asking about a home office after-the-fact indicates that you cannot deduct a home office but maybe your CPA can help you qualify in 2017 if there is a need for a HO.