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Is it better to deduct business expenses on 1099 than W2?

Posted: Mon Aug 03, 2020 11:04 am
by financial.freedom
For someone who has two jobs, a regular W2 and a side hustle job (sole proprietor 1099) is it better to deduct expenses on the 1099 side due to self employment tax?

I realize some things clearly go to one job or the other. But Internet, cellphone, and some other expenses are difficult to track to W2 vs 1099 and not sure what make the most sense tax-wise.

Thank you in advance!

Re: Is it better to deduct business expenses on 1099 than W2?

Posted: Mon Aug 03, 2020 11:22 am
by runner3081
You can only deduct direct business expenses related to 1099 employment for that purpose.

Re: Is it better to deduct business expenses on 1099 than W2?

Posted: Mon Aug 03, 2020 11:27 am
by financial.freedom
runner3081 wrote: Mon Aug 03, 2020 11:22 am You can only deduct direct business expenses related to 1099 employment for that purpose.
The accountant says we can deduct those expenses pretax on the W2 income (which is under our C Corp). Is that correct? If so, it is better to deduct under the 1099?

Re: Is it better to deduct business expenses on 1099 than W2?

Posted: Mon Aug 03, 2020 11:33 am
by 6bquick
I've struggled with that too. the solution I've settled on is to take the percentage of my household (mfj) income that is 1099 and multiply that by the bill I'm looking to deduct to get the amount. ie: 100k annual income. 45k from 1099, if Verizon bill is 1k for the year, I deduct $450. I'm honestly not sure what the letter of the law is on the matter, but I have not yet (knock wood) drawn the ire of the IRS for doing it this way.