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I got a 1099-NEC. What taxes do I owe?

Income on a 1099-NEC is self-employment income subject to both income tax and self-employment tax (15.3% on net earnings up to $176,100 for 2025). You can deduct legitimate business expenses before calculating SE tax, and deduct 50% of SE tax from your gross income. Source: IRS Publication 334, Schedule SE Instructions.

What is the standard deduction for 2025?

The standard deduction for 2025 is $15,000 for single filers and $30,000 for married filing jointly (Rev. Proc. 2024-40). You should itemize only if your qualified deductions — mortgage interest, state and local taxes (capped at $10,000), charitable contributions, and qualifying medical expenses — exceed these amounts.

Can W-2 employees deduct a home office in 2025?

No. The Tax Cuts and Jobs Act suspended the employee home office deduction through 2025. W-2 employees cannot deduct home office expenses on their federal return regardless of how much they work from home. Self-employed individuals and independent contractors still qualify under IRS Publication 587.

Do I have to pay taxes on K-1 income I never received as cash?

Yes. S-corp and partnership income reported on a Schedule K-1 is taxable in the year it is earned, not when distributed. This is called phantom income. Your basis in the entity increases by the taxable amount, which reduces future taxable gains when you eventually receive distributions. Source: IRS Publication 589, IRC §1366.

What is the self-employment tax rate for 2025?

The self-employment tax rate for 2025 is 15.3% on net self-employment earnings up to $176,100 (12.4% Social Security + 2.9% Medicare). Earnings above $176,100 are subject to the 2.9% Medicare portion only, plus an additional 0.9% Additional Medicare Tax on earnings above $200,000 for single filers. Source: IRS Schedule SE, Publication 334.