Frequently asked questions

For married couples, the smart move is often to have the higher earner delay to 70 while the lower earner claims earlier. Here's why: when one spouse dies, the survivor keeps the larger of the two ben…Read more

Self-employed individuals have several powerful options. (1) Solo 401(k): the most powerful — you contribute as both employee ($23,500 limit in 2025, plus $7,500 catch-up if 50+) and employer (up to 2…Read more

Self-employed individuals have several powerful options. (1) Solo 401(k): the most powerful — you contribute as both employee ($23,500 limit in 2025, plus $7,500 catch-up if 50+) and employer (up to 2…Read more

Self-employment (SE) tax covers Social Security (12.4%) and Medicare (2.9%) on your net self-employment income — totaling 15.3% up to the Social Security wage base ($176,100 in 2025), then 2.9% above…Read more

Self-employment (SE) tax covers Social Security (12.4%) and Medicare (2.9%) on your net self-employment income — totaling 15.3% up to the Social Security wage base ($176,100 in 2025), then 2.9% above…Read more

If you expect to owe at least $1,000 in federal taxes for the year after subtracting withholding and credits, you generally must make quarterly estimated tax payments to avoid penalties. The due dates…Read more

If you expect to owe at least $1,000 in federal taxes for the year after subtracting withholding and credits, you generally must make quarterly estimated tax payments to avoid penalties. The due dates…Read more

They're really two separate questions — legal structure and tax structure. A sole proprietorship is the default when you earn 1099 income with no paperwork; you and the business are legally the same,…Read more

An S-corp saves money by splitting your profit into a "reasonable salary" (subject to ~15.3% payroll tax) and remaining distributions (not subject to self-employment tax). But it adds real costs: payr…Read more

When you run an S-corp, the IRS requires you to pay yourself a "reasonable salary" through payroll for the work you actually do before taking the rest as distributions. It matters because the salary p…Read more

Forming an LLC happens at the state level and is usually straightforward. First, pick a name that's available in your state and meets naming rules. Second, file Articles of Organization with your stat…Read more

An EIN (Employer Identification Number) is a federal tax ID for your business, like a Social Security number for the entity. You need one if you have employees, run an S-corp or partnership, or want t…Read more

The Qualified Business Income (QBI) deduction lets many self-employed people and pass-through owners deduct up to 20% of their qualified business profit, directly reducing taxable income. If you net $…Read more

Above the taxable-income thresholds (roughly $191,950 single / $383,900 married filing jointly, indexed each year), the QBI deduction gets complicated in two ways. First, if you run a "specified servi…Read more

If you use part of your home regularly and exclusively for business, you can deduct expenses tied to that space — and you don't have to be a homeowner. The simplified method gives you $5 per square fo…Read more

You can deduct business driving two ways, but only business miles count — never commuting. The standard mileage method multiplies business miles by the IRS rate (67 cents per mile for 2024, adjusted y…Read more

Yes — business meals are generally 50% deductible when they have a clear business purpose, such as taking a client to lunch or eating while traveling for work. The food and drink can't be "lavish or e…Read more

Yes — startup and organizational costs are deductible, but with a special rule. You can deduct up to $5,000 of startup costs and up to $5,000 of organizational costs in your first year of business, wi…Read more

Both let you write off business equipment faster than spreading it over years, but they work differently. Section 179 lets you immediately expense the full cost of qualifying equipment — computers, ma…Read more

Yes — the self-employed health insurance deduction lets you deduct premiums you pay for medical, dental, and qualifying long-term care coverage for yourself, your spouse, and dependents. It's especial…Read more

The standard is simple to state and broad in practice: an expense is deductible if it's "ordinary and necessary" for your trade — common in your field and helpful to the business. That covers a wide r…Read more

A few myths recur. First, "I can write off my whole car" — only business-use miles or the business percentage of costs count, never commuting or personal trips. Second, "buying equipment in December s…Read more

It depends on your entity. As a sole proprietor or single-member LLC, you don't take a salary at all — you take an owner's draw, simply moving money from the business to yourself. The draw isn't a ded…Read more

Both report income to you and the IRS, but from different sources. A 1099-NEC reports nonemployee compensation — money a client or company paid you directly for services, typically $600 or more from t…Read more

Educational disclaimer: All content on WealthSerene.com is for educational purposes only and does not constitute investment advice. Projections and calculations are illustrative — actual results will vary based on market conditions, your specific situation, and many factors outside this tool’s scope. Always consult a qualified financial professional for advice specific to your situation. View full disclosures →