TurboTax for contractor and non-contractor work in the USA

March 25, 2024 6:43 AM

During 2023, I had a job that took out taxes along with work as a contractor (1099), the first time this has ever happened in my life. I've used TurboTax before when it was non contractor work and it was fine and easy. Does the software work just as well for the above mentioned mix of work types? Or is there another recommendation? I am not in a state that has the free Direct To File program.
posted by clocksock to Law & Government (6 answers total)

Yes, I am here to tell you that it's easy peasy. Turbo Tax despite its many flaws makes it super easy to do both W2 and 1099 in the same year.
posted by chesty_a_arthur at 6:51 AM on March 25 [2 favorites]

Yes, Turbo Tax will handle that just fine. This year I've plugged in 1099, W2, book royalties, and energy incentive payments, and it specifically asks about all of those almost verbatim.
posted by cocoagirl at 7:38 AM on March 25

I've used FreeTaxUSA to file when I had both W2 & 1099 income. Federal filing is free for everyone & state filing is only $15/state. I recommend FreeTaxUSA over Turbo Tax because they (unlike Turbo Tax) do not lobby to make it more difficult to file taxes.
posted by belladonna at 8:19 AM on March 25 [4 favorites]

With TurboTax the thing to watch out for is getting tricked into paying for something you don't actually need. They used to be notorious for hiding all the free options and implying that you had to upgrade ($$$) to file, after you'd already entered all your info. They're not technically supposed to use that kind of deceptive marketing anymore, but I don't trust Intuit even one tiny bit. The software itself should be fine, just be extra careful at checkout.
posted by radiogreentea at 10:23 AM on March 25 [1 favorite]

It might help to recognize that the contractor work (you get a 1099) means you are self-employed and need to a file Schedule C so the income and related expenses go into a different part of the return than your work as an employee (where you get a W2 and then deduct taxes from your paycheck). When I used TurboTax many years ago it had no problem figuring this out and calculating the extra taxes due on self-employed income and putting it all in the right place.

The one thing to be careful about is that you can deduct your business expenses as a self-employed contractor that would not be deductible as an employee. So make sure you are tracking which expenses are associated with which income stream.
posted by metahawk at 11:52 AM on March 25 [1 favorite]

I have not used TurboTax for a number of years, but i'm sure your situation is handled routinely as described by metahawk.

I do remember having some issues with IRA and SEP limits though I don't remember exactly what. Basically, you can save W2 money in an IRA, and you can save 1099 money in a Simplified Employed Pension, both are subject to limits.
posted by SemiSalt at 5:06 AM on March 26