Contractor Payments Tax Deductions

Payments to independent contractors and freelancers you hire are fully deductible. Proper documentation and 1099 filing are required for amounts over $600.

contractors1099-NECfreelancer paymentsoutsourcing

check_circleWhat You Can Deduct

  • checkFreelance developer or designer fees
  • checkVirtual assistant services
  • checkContract bookkeeper payments
  • checkFreelance writer or content creator fees
  • checkContracted marketing services
  • checkIndependent sales rep commissions

lightbulbTips for Keeping Records

  • tips_and_updatesCollect W-9 forms from all contractors before paying them
  • tips_and_updatesFile 1099-NEC by January 31 for any contractor paid $600 or more
  • tips_and_updatesKeep signed contracts detailing scope and payment terms
  • tips_and_updatesUse a separate payment method for contractor payments to simplify tracking

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