Q: I have been hired as an as-needed "individual/sole proprietor or single-member LLC" (W9) & don't know how to proceed re:
taxes.
I will get paid for mileage while on shift, but not for weekly 24-mile RT supply pick-ups/cash drop-offs.
I have also purchased a dedicated iPad, as they require apps in which i must give rights to pretty much absolute control over my device, and hence, I do not wish to use my personal device.
Uniforms/scrubs, shoes, and other items are to be purchased by the IC.
I am given a shift of several hrs, and so far, I have been running from call to call without a break, and trying to keep foods/snacks/drinks cool/safe is difficult, & I wonder if I can deduct in/out runs for fast food/groceries, as well.
A friend suggested filing for a sole proprietor LLC, & blindly, I have done so, to try to help w/ my tax liabilities & help cover my costs. Does this seem appropriate, and how might I proceed from here?
Thank you so very much!
A:
As an independent contractor (IC) in California, you're responsible for managing your own taxes, which includes setting aside money for both federal and state income taxes, as well as self-employment taxes. Since you've already established a sole proprietor LLC, you'll report your income and expenses on Schedule C of your tax return. This structure can help you by allowing you to deduct business expenses directly related to your work, which can reduce your taxable income.
For the costs you're incurring, such as mileage for work-related travel, uniforms, and the iPad, these can generally be deducted as business expenses. However, the mileage for the weekly supply pickups and cash drop-offs, as well as the purchase of uniforms and work-related items, should be carefully documented. For meals, the cost of meals consumed while you are away from your tax home (usually your place of business) for work may be partially deductible, but ordinary grocery expenses and fast food runs might not be unless they meet specific requirements.
Moving forward, keep detailed records of all your expenses, including receipts, mileage logs, and any other relevant documentation. Consider estimating your quarterly taxes to avoid penalties. If you're unsure about the details, consulting with a tax professional could help you navigate your specific situation more effectively.
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