How Do You Find a CPA Who Actually Listens (Instead of Bouncing You Around)?

Summary of What This Blog Covers

• W-2 and 1099 income are taxed differently. 1099 income may trigger higher self-employment tax.
  
  
• Electing S-Corp status can reduce your tax burden if your business earns over $50K.
  
  
• Tracking business expenses properly ensures you don’t miss valuable tax deductions.
  
  
• Retirement plans like Solo 401(k)s and SEP IRAs lower taxable income while building savings.
  
  

You’ve got income coming in from multiple directions, don’t you?

Maybe you’re working a full-time job, building your dream freelance business at night, collecting payments from clients on the weekends, or testing out a side hustle that’s showing signs of turning into something big. Maybe you even picked up a few surprise 1099 forms this year which are unexpected, exciting, and slightly panic-inducing.

If you’ve been balancing multiple income streams, riding the momentum of your ambition, and trying to navigate tax season without a complete meltdown then you are exactly where you need to be.

And if you’ve ever looked at your tax bill and thought, “Wait, how do I owe that much?”. You’re definitely not alone.

The reality is, most entrepreneurs and independent earners overpay in taxes not because they’re careless, but because they’re busy. You’re building. You’re testing ideas. You’re investing in growth. You’re doing a dozen things at once. But the one thing that often gets pushed down the to-do list? Strategic tax planning.

Let’s fix that together.

Because the IRS isn’t going to remind you that you’re entitled to deductions. It’s not going to call you up and suggest a better business structure. It certainly won’t tell you that you could be using a retirement plan to shave thousands off your taxable income.

That’s where we come in.

At Insogna, we work with self-starters, creative thinkers, and growth-focused professionals to turn taxes into a strategy, not a stressor. Whether you’re searching for a tax preparer near you, a CPA in Austin, Texas, or you’re just trying to make sense of the blend of W-2s, 1099s, and invoices in your life, you’re in the right place.

Let’s talk about what’s happening behind the scenes and how to finally stop overpaying in taxes.

What Happens When You’re Earning From Multiple Income Streams?

You might have a W-2 job that’s consistent and predictable. Your employer withholds taxes, issues a W2 form, and covers half of your Social Security and Medicare taxes. It’s straightforward.

But that 1099 income from freelance work, consulting, or side projects? That changes the game.

If you receive a 1099-NEC, 1099-K, or have to fill out a W9 tax form to receive payment, then the IRS considers you self-employed and that comes with a new set of rules. And costs.

Here’s what you need to know:

• You’re responsible for self-employment tax, which is currently 15.3% (that’s both the employer and employee portions of Social Security and Medicare).
  
  
• You don’t have any taxes automatically withheld like with W-2 income.
  
  
• You must file quarterly estimated tax payments to avoid IRS penalties.
  
  
• You may be eligible for an entirely different set of tax deductions, which can drastically reduce what you owe.
  
  

This is why it’s not just about making money, it’s about how you report and manage that money.

Let’s look at the most common and costly mistakes we see among high-performing, multi-income earners and how you can sidestep them with clarity and confidence.

The Mistakes That Are Costing You Thousands (And What To Do Instead)

Mistake #1: Paying Full Self-Employment Tax When You Don’t Have To

Let’s say you earn $100,000 in freelance income reported on a 1099 tax form.

Without a strategy, you’ll pay:

• $15,300 in self-employment tax
  
  
• Federal income tax (based on your tax bracket)
  
  
• State taxes, depending on where you live
  
  

That’s before deductions. Before credits. Before any tax planning.

If you’re running your business as a sole proprietor or a single-member LLC, this is the default. But it doesn’t have to be.

The fix? Consider electing S Corporation status.

When your net business income exceeds $50,000, an S-Corp election can allow you to:

• Pay yourself a reasonable salary, which is subject to self-employment tax
  
  
• Take the remaining income as a distribution, which is not
  
  
• Potentially save thousands in taxes annually
  
  

For example:
 Earn $100,000 → Pay yourself $50,000 as salary → Take $50,000 as distribution
 Self-employment tax is only applied to the salary, not the full income
 That’s a tax savings of around $7,500

This strategy isn’t for everyone, but if you’ve crossed that $50K line, a small business CPA in Austin can help you evaluate whether this move is right for you.

Mistake #2: Missing Out on Deductions You’re Already Paying For

Here’s a wild thought: You could be paying for things right now (rent, software, travel, subscriptions) and not realizing they’re legitimate tax deductions.

The IRS allows you to deduct “ordinary and necessary” expenses related to running your business. That means:

• Home office expenses: A portion of your rent or mortgage, utilities, and internet
  
  
• Software and tech: Think CRM platforms, video editing tools, design apps, and project management systems
  
  
• Professional development: Online courses, certification programs, masterminds, and conferences
  
  
• Business travel: Flights, hotels, rideshare costs—if it’s for work, it may be deductible
  
  
• Office supplies and equipment: From laptops to desks to ergonomic chairs
  
  

The caveat? You must track these expenses accurately.

If you’re still sorting receipts in a shoebox, or scanning your inbox for past invoices during tax season, it’s time to level up.

Consider using:

• QuickBooks Self-Employed
  
  
• Expensify for receipt storage
  
  
• MileIQ for mileage tracking
  
  

And if you’re unsure whether a purchase is deductible, a tax accountant near you can help set up an expense strategy that’s not just efficient, but audit-proof.

Mistake #3: Underestimating the Power of Retirement Contributions

Retirement plans aren’t just for saving, they’re one of the most effective ways to lower your taxable income.

When you’re self-employed or earning 1099 income, you get access to plans that employees can’t touch.

Let’s look at a few top options:

If you have both a W2 form and freelance income, you may be able to contribute to both your employer’s 401(k) and a Solo 401(k), stacking tax savings.

This isn’t just about retirement. It’s about building long-term wealth while trimming your tax bill today. A certified public accountant in Austin can build a custom plan that aligns with your income, business structure, and future goals.

Three Tax Moves That Will Change the Game for You

Now that we’ve unpacked the risks, let’s focus on the moves that will help you pay less, save more, and feel empowered about your tax strategy.

1. Elect an S-Corp When the Time is Right

This structure can be a game-changer. But timing matters.

When your business consistently earns more than $50,000 in profit, and you’re ready to run payroll (or have someone handle it for you), electing S-Corp status may:

• Lower your self-employment tax
  
  
• Legitimize your business in the eyes of the IRS
  
  
• Make you eligible for additional tax planning strategies
  
  

It does come with some requirements:

• You must pay yourself a “reasonable salary”
  
  
• You’ll need to file a separate business tax return (IRS Form 1120-S)
  
  
• You’ll likely need help managing payroll and quarterly tax payments
  
  

But the savings can outweigh the admin burden especially when guided by a licensed CPA in Austin, TX who specializes in S-Corp transitions.

2. Build an Expense Tracking System You Can Stick To

There’s no shortage of tools, but the best system is the one you’ll actually use. Whether that’s an app, a spreadsheet, or monthly reviews with your accountant, the goal is consistency.

The IRS requires:

• Receipts or invoices
  
  
• Documentation of business purpose
  
  
• Mileage logs for travel-related deductions
  
  

This is where Austin accounting services can help set you up with a cloud-based bookkeeping system tailored to your business. Don’t underestimate how much more confident you’ll feel at tax time when everything is categorized and ready to go.

3. Create a Retirement Plan That Works for Your Income Mix

If your income fluctuates, you don’t want a one-size-fits-all plan. You want flexibility. That’s where SEP IRAs and Solo 401(k)s shine.

With the right plan:

• You’ll reduce your current taxable income
  
  
• You’ll build tax-advantaged wealth
  
  
• You’ll increase financial resilience even in uncertain times
  
  

And if you’re just starting out and can’t contribute the full amount? No problem. Even modest contributions, made consistently, can lead to big results over time. A CPA certified public accountant can help you get started with as little complexity as possible.

Bonus Consideration: Foreign Income and FBAR Filing

Do you have foreign clients? Hold overseas accounts? Getting paid in a currency other than USD?

If your foreign financial accounts total more than $10,000 at any point in the year, you may be required to file an FBAR (FinCEN Form 114).

This is a critical compliance issue for digital nomads, online entrepreneurs, and consultants working across borders.

Penalties for missing FBAR deadlines are steep. We’re talking $10,000 to $100,000+ in extreme cases.

A tax advisor experienced in FBAR filing like the ones at Insogna can help you stay compliant, stay protected, and avoid costly mistakes.

Let’s Wrap This Up With Clarity and Confidence

You’re not just earning income, you’re building something. Something that’s worth protecting, optimizing, and growing. That’s why your tax strategy matters.

You don’t need to feel confused, overwhelmed, or reactive when it comes to tax season. With the right tools, the right insights, and the right team behind you, taxes become a lever not a limitation.

So whether you’re:

• A freelancer with 1099s rolling in
  
  
• A full-time employee with a side hustle
  
  
• A business owner scaling past six figures
  
  
• Or simply someone ready to take control of your financial future
  
  

There’s a better way to do taxes. And we’re here to show you how.

Schedule a consultation with Insogna today. Let’s take everything you’re building and put the financial foundation underneath it that it truly deserves.

Because you weren’t meant to overpay taxes.
 You were meant to grow, scale, and thrive with a tax plan that supports that every step of the way.

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