Don't go broke saving
A few years back, Instant Pot, an electric pressure cooker, was all the rage.
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.
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.
Want the full playbook? Check out Going 1099.