1099 Employee Question

[bellwillj]

In June 2023, I established an LLC company to provide educational support services to other companies.

From Jan - Dec 2023, I worked with 3 companies, by providing educational support services, as a 1099 Employee, and each of those 3 companies gave me a 1099-NEC.

QUESTION 1:   When I file my income tax for 2023, from Jan - June 2023, do I file all expenses as myself as an Independent Contractor using my SSN (not under the LLC company)?

QUESTION 2:  From July - Dec 2023, do I file all expenses under the LLC?

QUESTION 3:  Since for all companies, I provide the same services, can I list all expenses under one company, or do I have to list it per each company that gave me a 1099-NEC?

[Bsch4477 · Accepted solution]

You have one business which is reported on your personal tax return. Report all income and expenses on Sch C. Your EIN is associated with your Social Security number so it doesn’t matter which you use. 

[Vanessa A]

I am assuming you are a single member LLC and did not elect to be treated as an S-Corp.  This means, that for tax purposes you are treated the same before and after you filed for the LLC. 

As a SMLLC, all of your income is reported under your social security number.  This means, there is no need to separate the income from basically the same business just because you made a change in the structure of your business.  All of the income is still reported on Schedule C.  Since you received a 1099-NEC from all of them, you were not an employee of any of the companies, so all income is treated the same and reported the same.

Yes, since this is all one business activity operating as one business, you will report all the 1099-NEC's under one business on one Schedule C.  After you enter your income from the 1099-NEC, you will then be able to enter your self-employment expenses. 

To enter your self-employment income click the following:

1. Federal
2. Income and Expenses
3. Show More next to Self-Employment
4. Start next to Self-Employment
5. Yes, to you have any self-employment income or expenses
6. Enter the type of self-employment work you do and you can select that you use your name for your business
7. Click through a few more screens and you will get to a screen that says "Your XX info"
8. Click Looks good
9. Then you will come to a screen that says Let's enter the income for your business.  It will give you the option of 1099-NEC or Other self-employed income including the 1099K , cash and checks.  Here is where you will enter your 1099
10. If you do not select one, it will not let you enter your income
11. Enter your self-employment income on the next screen
12. Continue and on the next screen click add expenses

In the expense section, depending on where you work, you may be able to take a home office deduction.  If you are traveling to client sites, you would be able to deduct your mileage or actual vehicle expenses.  Plus any other expenses incurred to do your job.  

This income will be reported on Schedule C which is part of your overall tax return. This also means you will be subject to SE Tax.  If you did not pay SE Taxes in 2023, and if you plan to do this again in 2024, it may be a good idea to make  quarterly estimated payments to cover your SE taxes of 15.3% and avoid penalties.

If you have health insurance through a non-employer, you may also be able to deduct your health insurance premiums as a business deduction. The Self-Employed Health Insurance deduction is limited to your earnings.  Meaning, you cannot deduct more than you earned. This is also entered in the business expense section. 

Taking Business Expense Deductions