I know this doesn't apply to taxes being filed this year, but I'd like to have an idea what to expect next year.
My girlfriend currently has a few different jobs:
- A W-2 Job making $30k/year
- A side job where she is paid by 3 different clients through 1099s making ~$30k/year
- A different side job where she is paid by a client through a 1099 making ~$10k/year
Until now we basically deducted any work related expenses she had from the 1099s and paid taxes on the remainder. The new tax format has me a bit confused on a few details. Below is what I THINK is correct.
- She is eligible to claim her 1099 income as a sole proprietorship
- 20% of the income from said sole proprietorship can be deducted per the new regulations
- She makes less than $157k as an individual, thus there are no W2 limits on said deduction
- She makes $40k through the 1099 jobs after expenses, thus will only pay taxes on $32k ($40k-20%) from said jobs
What I'm not 100% clear on is whether work expenses such as travel or office supplies from her 1099 jobs can be deducted when calculating her QBI (qualified business income). If she has $10k in expenses, but makes $50k gross, her QBI would be $40k, is that correct?
Her friends who work in similar businesses are freaking out about the removal of work related deductions for employees, but since she is not an "employee" that doesn't apply to her, right? Is she only restricted from deducting workplace expenses related to her W2?
