I'm Dale, the author of Going 1099

Don't go broke saving

Published 23 days ago • 1 min read

A few years back, Instant Pot, an electric pressure cooker, was all the rage.

Instant Pot

You could throw a frozen chicken and potatoes in there and within an hour would have a perfectly cooked meal.

I didn't care about buying one until Amazon had a good deal on prime day.

I don't remember the discount exactly but it was maybe 30% off the normal price.

And since that day 8 years ago, I have cooked tens of meals with it.

Was it a waste of money?

Mostly. But I "got a good deal."

Similarly, lots of people get excited about business expense tax write offs.

They have a list of toys or services they want and think by claiming it as a business expense they are getting a "good deal" on it.

This is wrong.

First, you can only write off purchases that are legitimate business expenses. Just because you work from home your snacks don't count as a deductible meal.

When you work for yourself in a service business, you really don't have that many expenses. I'd be surprised if you had more than a few thousand bucks of legitimate business expenses per year, at least in the solo 1099 federal sub-contracting world.

Second, buying stuff just because you can get a tax deduction is dumb.

I listened to a podcast where a guy bought a truck through his business because he wanted to pay less taxes.

He did not need a new truck. He just wanted one. So he bought it and that put him in a bad financial situation.

He lost the forest for the trees and was going broke saving money.

Don't buy stuff you don't need just because you can maybe save a few bucks in taxes.

Now, there is definitely one legitimate tax vehicle you should take advantage of as a 1099, and that's the individual or solo 401k.

Basically, you can defer a much higher percentage of your income to a tax deferred 401k.

As a W2, you can contribute up to $23,000 in 2024.

As a 1099, you could potentially contribute up to $69,000.

IRS Guide to Solo 401ks

This has the potential to grow your wealth substantially more than miscellaneous business expenses.

Going 1099 is financially exciting, but not because you can maybe deduct your Instant Pot.

If you're interested in learning how to get your first solo 1099 federal sub-contract, check out my book:

Going 1099: How to become a solo federal sub-contractor and gain control of your working life, earn more money and unlock more free time

I'm Dale, the author of Going 1099

Going 1099 is a book that teaches you how to become a solo federal sub-contractor and gain control of your working life, earn more money and unlock more free time. I wrote it because quite a few people have asked me how they can become a 1099. I figured it was best to write a single book that I can send them and that I can share with others who are interested. This newsletter goes out Monday - Friday and covers topics that will help you succeed in starting and maintaining successful 1099 career.

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