Page No 01
advisersgiveback.org
THE
Keep More | Owe Less | Stress Less
CONTRACTOR TAX
PLAYBOOK
Presented by:
Kieren Reilly, CFP®
Duration: ~20 minutes + Q&A
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W-2 AUTOPILOT
No withholding = you’re your own payroll department
CONTRACTOR DIY
The rules aren’t impossible—just unfamiliar
Why Contractor Taxes Feel Hard (And The Fix)
Goal Today: A Simple System You Can Repeat
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What Changes
W-2: Withholding happens automatically
Vs W-2 Work
1099/CONTRACTOR: you pay taxes directly
INCOME
TAX
SELF-EMPLOYMENT TAX
02
Buckets
01
Buckets
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What You Owe
The Big Picture
INCOME TAX
(federal + state, based on profit)
SELF-EMPLOYMENT TAX (Social Security
+ Medicare, based on net earnings)
You Pay �On Profit, Not Revenue
Revenue
Taxes
Expenses
Profit
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Key Definitions
(In Plain English)
REVENUE
Money paid to you
BUSINESS EXPENSES
Costs required to do the work
NET PROFIT
What’s left (this drives most taxes)
ESTIMATED TAXES
Prepayments during the year
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(Stop The Surprise)
The “Set-aside” Rule
BUILD A MONTHLY HABIT:
Set aside a % of each payment
USE A SEPARATE
“Tax” account so it’s not tempting
TAX
ACCOUNT
FUNNEL FROM
PAYMENT
SPEND
ACCOUNT
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TOO LOW
SAFE
TOO HIGH
Percentage (No
A Simple Starting
Start with a conservative set-aside
(then refine)
IF YOU’RE UNSURE: pick a % that creates safety and review quarterly
False Precision)
Your Goal: Never be short when estimates are due
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Taxes: The Rhythm
Quarterly Estimated
You typically pay 4 times per year
WHY IT MATTERS:
Reduces penalties and cash crunch
2026
MARCH
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1099 income + non-1099 payments still count
Platforms may report differently than your bank totals
What Counts As “Income”
(And What’s Tricky)
Track From Invoices + Deposits, Not Memory
INVOICES | DEPOSITS | PLATFORM REPORTS |
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EXPENSES REDUCE PROFIT
Deductions reduce taxable profit
Rule of thumb: ordinary + necessary for your work
Expenses: The
Deduction Mindset
Not
Perfectly
Track Consistently
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Software/tools, supplies, equipment
Business mileage/ vehicle costs (if eligible)
Professional services, education, marketing
Home office (if eligible), phone/internet portion
Common Deductible
Categories (Simple List)
DEDUCTIONS
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TWO-LANE ROAD
Separate business checking + card (even if it’s simple)
CLEANER RECORDS = less stress, fewer missed deductions
The #1 Mistake: Mixing
Personal + Business
Makes filing and audits dramatically easier
Business
Personal
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Takes 10 Minutes/Week
Recordkeeping That
WEEKLY:
Reconcile income + categorize expenses
MONTHLY:
Check tax set-aside %
QUARTERLY:
Confirm estimated tax payment + adjust
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Income Docs: 1099s, platform statements, invoices
Expense Docs: Receipts, bank statements, mileage logs
Your “Tax Folder System”
(Filing Made Easy)
Year-End: Summary report for preparer or software
INCOME
EXPENSES
MILEAGE
YEAR-END.
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Red Flags To
Avoid (Stay Boring)
01
Huge deductions with no documentation
02
Mixing personal expenses as business
03
No mileage log but claiming vehicle deductions
04
Large losses year after year without a business case
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Keep digital receipts (photo + cloud folder)
Notes on unusual expenses (“client project X”)
Track mileage contemporaneously (as they occur)
Save quarterly payment confirmations
Proof” Habits (Low
The “Audit-
Effort, High Value)
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02.
Pull category summaries
01.
Confirm totals match bank/platform records
03.
Verify home office/mileage documentation
04.
Prepare a clean packet for filing
Year-End Checklist (So April Is Calm)
Calm April
Calm April
Calm April
Calm April
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30-Day Action Plan
(Choose 3 Moves)
Decide
DIY software vs tax pro
Open a separate Tax savings account
Start a weekly
10-minute bookkeeping slot
Set calendar reminders for quarterly dates
Create 5 expense categories and stick to them
Start a mileage log (if relevant)
01.
02.
03.
04.
05.
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You Get After This
Close: What
Clarity: what you owe and why
Control: a predictable set-aside system
Confidence: clean records, fewer mistakes
Calm: filing is faster and less stressful
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Thank
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