First time filing 1099 taxes

[hellokittytennessee]

This is the first year that I am having to file self-employment taxes as an independent contractor.  I have paid $659 in estimated taxes to the IRS in 2024.  I am still waiting on the 1099-NEC forms from my employers.  I saved up all records.  I only made around $3,500 in the past year and purchased over $26,000 in home office supplies as a "start up."  I have to write a portion of the space and supplies off.  I doubt that I will get a significant refund despite the records that I kept.  In other words, have I suffered a legal "net loss" over net income?  Thank you.

[BrittanyS]

Depending on how you entered, your start-up costs can affect your net loss. Start-up costs can be deducted up to $5,000 in the current year and the rest amortized over 15 years.   This will reduce a major net loss for the current period.

TurboTax can help you amortize your start-up costs.  You will need to determine which expenses were start-up costs.  You can follow these steps in TurboTax:

1. click wages and income
2. click start next to self-employment income
3. answer interview questions.  
4. When you get to expenses scroll down to less common expenses and type in startup cost. 
5. Mark the box for startup cost
6. Click the edit button beside startup cost
7. Proceed through the interview questions
8. Enter each expense individually
9. When finished you will be asked, "how much do you want to expense"  You can expense up to $5,000 and the remainder will be amortized

You can also deduct home office space.  To qualify for home office space you have to meet 4 requirements set by the IRS.

1. Exclusive use
2. Regular use 
3. For your business only
4. Either you principal place of business, used regularly to meet with customers, or a separate structure

To enter home office use you will follow the steps 1-3 above and when you get to expenses you will select home office and answer the interview questions.

• Startup Costs
• How to expense and amortize startup costs
• Home Office 

[hellokittytennessee]

I would like to take the itemized approach instead of the standard deduction as I have saved up receipts from items and utilities.  

[VolvoGirl · Accepted solution]

Don't confuse itemized deductions on schedule A with your business expenses/deductions on schedule C. They are separate. For Schedule A personal deductions, you get to take your itemized deductions or the standard deduction, whichever is larger. Itemized deductions are things like Medical, Gifts to Charity, State Income Taxes Paid, Mortgage Interest, Property Taxes, Car Registration fees, etc.

You get to take both, your business expenses on Schedule C and the Standard Deduction (or your personal Itemized Deductions). And you have to enter your business expenses. Be aware, if you have self employment income you can get in trouble for not reporting all your expenses to qualify for the EIC.