Tax help for consultants and fractional executives
You are paid for what you know, and nobody withholds a dime of it. We prepare the return, and we tell you what to set aside before the next quarter comes due.
Nothing is due today. Personal returns start at $250.
Consulting income arrives in lumps from a handful of clients, and only some of them send a Form 1099-NEC. Nothing is withheld, so the planning falls to you. Your real costs are travel to client sites, the software and research you run on, the credentials that keep you hireable, and the subcontractors you bring onto engagements, and a preparer who does not know your work will never think to ask about them.
What consultants can usually deduct
Ordinary and necessary costs of your work. Rules and dollar limits change year to year, so we confirm every one of these against the current year when we prepare your return.
Home office that qualifies
If a room, or a clearly defined part of a room, is used regularly and only for your consulting work, you can deduct a share of rent or mortgage interest, utilities, renters or homeowners insurance, and repairs. There is also a simplified square foot method that caps the space it covers and skips most of the recordkeeping.
Two tests have to be met at the same time: regular use and exclusive use. A dedicated desk area in a spare room can qualify. The dining table your family eats at cannot, no matter how many hours you bill from it. The space also has to be your principal place of business or somewhere you regularly meet clients.
Mileage to client sites
Driving to a client office, a site visit, a workshop you are running, or a business development meeting is business mileage. You can use the IRS standard mileage rate for that year or track actual vehicle costs, and either way you need a log with dates, destinations, and business purpose.
Driving between home and a regular outside office you rent is commuting and is not deductible. When your home qualifies as your principal place of business, the trips out to clients from there generally do count. There are rules about switching between the mileage rate and actual costs later, so tell us before you change methods.
Travel for engagements
Flights, hotels, rental cars, baggage fees, and rides to and from the airport for an overnight trip to a client are deductible when the trip is primarily for business. The same goes for a conference where you are speaking or selling.
If a client reimburses you separately and that money never lands in your income, you cannot deduct the expense too. If the reimbursement is included in the amount reported on your Form 1099-NEC, you report the gross and then deduct the expense.
Errors and omissions insurance
Professional liability coverage, cyber liability, and the general liability policy a client's procurement team insists on before they will sign are all deductible. So are certificate and endorsement fees tied to a contract.
Your own life insurance and personal disability policies are not business deductions, even though you bought them because you went out on your own.
Software, data, and research
Project and CRM tools, video conferencing, cloud storage, e-signature, survey and analytics platforms, sales prospecting subscriptions, industry data and analyst reports, and the AI tools you draft and model with. This is the modern version of a consultant's library.
Split anything you also use personally and deduct only the business share. A family streaming plan is not research.
Subcontractors and specialists
What you pay a designer, researcher, developer, editor, or a fellow consultant you brought onto an engagement is deductible, and so is a virtual assistant or bookkeeper who keeps your practice running.
Get a Form W-9 before you pay anyone. If you pay an unincorporated person or firm for services above the reporting threshold in effect for that year, you generally have to issue a Form 1099-NEC, and the filing deadline falls at the end of January. Penalties apply when it is late or skipped.
Certifications, CPE, and conferences
Renewing a credential you already hold, continuing education hours, industry conferences, association and chamber dues, and the books, courses, or coaching that sharpen what you already sell.
Education that trains you for a new line of work is not deductible, even when it plainly helps your career. Keeping up the skills of the practice you already have is deductible. Qualifying for a new profession is not. Dues to a club organized for pleasure or recreation are not deductible either, no matter how much networking happens there.
Business development and marketing
Your website and hosting, domain, headshots, a designer for your deck or proposal templates, newsletter or podcast production, paid ads, event sponsorship, and printing for a workshop.
Business gifts are capped by a per recipient, per year dollar limit written into the tax law, so a case of wine sent to a client is often deductible only in part. Keep a note of who received what.
Client and prospect meals
A meal with a client or a prospect is deductible at the percentage the law allows for that year, as long as you are present, business is actually discussed, and the cost is not lavish. Your own meals on an overnight business trip follow the same limit.
Entertainment is a separate category and is not deductible. The ballgame tickets are out. Food and drink bought at that event can still qualify if they are invoiced separately from the tickets.
Self-employed health insurance
Premiums you pay for yourself, your spouse, your dependents, and a child under the age set in the rule can reduce your income. This one is claimed on your personal return rather than on Schedule C, so it lowers income tax but not self-employment tax.
You cannot claim it for any month you were eligible to join a subsidized health plan through your own employer or your spouse's employer. The deduction is also capped by the earned income of the business, so a loss year gives you nothing here.
Retirement plan contributions
A SEP IRA or a solo 401(k) lets a profitable one person practice set aside more than a regular IRA allows, and the contribution reduces taxable income for the year it applies to.
A solo 401(k) only works while the practice has no employees other than you and your spouse. The deadline to open the account and the deadline to fund it are different, and they vary by plan type, so raise it with us in the fall rather than at filing time.
Equipment and workspace
Laptop, second monitor, dock, headset, phone, a chair that survives a ten hour proposal week, and the coworking membership or day passes you use between client sites. Larger purchases can often be deducted in the year you put them into service instead of over several years.
Deduct only the business percentage of anything you also use at home, and keep the receipt. A phone the whole family uses is not a full deduction. Writing off a large purchase in one year also depends on the rules in effect and on having enough profit to absorb it.
Schedule C is the right home for most consulting practices, and it usually stops being the cheaper option only when profit is high enough and steady enough that the self-employment tax saved by an S corporation election clearly beats the cost of payroll, a separate business return, state fees, and a salary you actually have to pay yourself, and even then consulting is treated as a specified service field, so the qualified business income deduction can shrink or disappear at higher income and change the answer.
What to bring us
You do not need all of it to start. Send what you have and your checklist shows what is still open.
- Every Form 1099-NEC, 1099-MISC, and 1099-K you received, plus a list of clients who paid you without sending one
- Year-end totals from your business checking and credit card, or a copy of your bookkeeping file
- Your mileage log or app export, with total miles for the year and business miles separated
- Home office numbers: square feet of the work space, square feet of the whole home, and what you paid for rent or mortgage interest, utilities, insurance, and repairs
- Dates and amounts of every estimated tax payment you made, federal and state
- Health insurance premiums you paid for the year, and Form 1095-A if you bought coverage through the marketplace
- Retirement contributions you made, with the plan type and the date each one was funded
- A list of subcontractors you paid, with their Forms W-9 and any Forms 1099-NEC you filed
- A list of states where you worked onsite during the year, with rough days in each
- Entity paperwork if you have it: LLC filing, EIN letter, S corporation approval letter, and last year's return if we have not seen it
What trips people up
Running the practice out of one personal bank account
Open a business checking account and a card used only for the business, and route every client payment and every expense through them. It takes an afternoon and it turns a March reconstruction project into a download.
Skipping quarterly estimated payments
The IRS can charge an underpayment penalty, figured much like interest, for paying late during the year even if the balance is paid in full by the filing deadline. Set the money aside as each invoice clears and pay on the quarterly schedule we give you.
Treating a client reimbursement as if it never happened
Check whether the reimbursed airfare and hotel are inside the total on the Form 1099-NEC. If they are, report the gross and deduct the travel. If you leave the expense off, you pay tax on money you already spent.
Deducting the suit bought for the client presentation
Clothing that is suitable for everyday wear is not deductible, and neither is the dry cleaning. The test is whether it could be worn off the job, not whether you would have bought it otherwise.
Ignoring the states you flew into
Working onsite in another state can create a filing requirement there, and the trigger is different in every state. Track your onsite days by state as you go and we will tell you which ones matter.
What it costs
Our published list, the same one everyone sees. Prices marked "from" are starting points, and your exact number is confirmed in writing before any work begins.
$0 is due today. You pay when you sign, or you can have your fee come out of your refund, so it can be $0 out of pocket.
Questions we get from your trade
Some clients sent a Form 1099-NEC and some just wired me with no form. What do I report?+
All of it. A 1099-NEC is a copy of what one client told the IRS, not the definition of your income. Your own records are the starting point, and we reconcile the forms against them so nothing is missed and nothing gets counted twice.
Should I elect S corporation status?+
Sometimes. It can lower self-employment tax on the profit above a reasonable salary, and it costs you payroll, a separate business return, and more admin every month. It also changes how your health insurance and your qualified business income deduction work, which can cut the other way. We run your real numbers both ways and show you where the break even sits. If the answer is no this year, we will tell you that.
I live in one state and my clients are in three others. Where do I file?+
It depends on where you live and where you physically did the work. If your home state has an income tax, you file there as a resident. You may also owe a nonresident return in a state where you performed work in person, and the trigger for that varies by state. Keep a simple record of which states you worked in and roughly how many days, and bring it with you.
Nobody withholds anything from my invoices. How do I avoid a shock in April?+
Move a set share of every payment into a separate savings account the day it lands, and pay quarterly estimates. The right share depends on your profit, your spouse's income if you file jointly, and your state, so we calculate the amount and give you the dates.
I work from my kitchen table some days and a client's office other days. Do I get a home office?+
Only if some part of your home is used regularly and only for the business, and it is your principal place of business or where you regularly meet clients. A dedicated desk area in a spare room can qualify. Shared family space cannot. If you rent coworking instead, that rent is deductible on its own.
My engagement ran through a staffing or consulting platform that took a cut. Gross or net?+
Report the gross the payer reported, then deduct the platform fee as an expense. If they reported your gross and you show only the net, your return looks like it is hiding income, and that is what draws a letter.
Let us take the tax part off your plate.
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