Mid-Year Checklist for 1099 Earners: Taxes, Deductions, and More

By the time June rolls around, most 1099 earners—freelancers, consultants, contractors—are already knee-deep in work. But what about taxes? The middle of the year is a critical checkpoint. It’s a moment to step back, evaluate, and adjust before things spiral toward year-end chaos. This checklist is for you if you’ve received non-W2 income and want to avoid a tax-time panic attack.

1. Do You Need to Pay Estimated Taxes Mid-Year?

Yes. If you’re earning 1099 income, you’re responsible for paying quarterly estimated taxes. The IRS doesn’t withhold anything automatically. If you skip payments or underpay, you risk penalties.

• Q2 estimated taxes are due June 15.
• Use Form 1040-ES to calculate what you owe.
• If you missed Q1, you should still pay as soon as possible.

This IRS page has a helpful overview.

2. How Do You Calculate Your Mid-Year Tax Payment?

The IRS expects you to pay at least 90% of your total tax liability through the year. One approach:

• Add up your 1099 income so far.
• Subtract eligible deductions (we’ll get to those).
• Use IRS tax brackets or last year’s return to estimate what you might owe.
• Divide it into quarters (Q1–Q4) to smooth things out.

Or use tools like QuickBooks, Keeper, or work with a tax advisor to fine-tune your projection.

Also see: 1099 Contractor Tax Guide

3. What If You Missed a Payment Earlier in the Year?

Late payments aren’t the end of the world, but they can trigger penalties. The IRS charges interest and penalties for underpayment. Here’s what you can do:

• Pay what you owe now.
• Adjust Q3 and Q4 payments to make up the shortfall.
• File Form 2210 with your return if you’re penalized.

Some tax advisors can help you minimize or remove penalties if you have a good explanation.

4. Which Deductions Should You Review Mid-Year?

Don’t wait until December to dig through your bank statements. Start now.

• Home office expenses (pro-rated for business use)
• Mileage and travel (track with apps like MileIQ or Everlance)
• Equipment and software
• Subscriptions, professional services, and business meals

Planning business trips? Review this guide to deductible vacations

5. Can You Still Deduct Missed Expenses?

Yes—if you have documentation. If you forgot to categorize something, now’s the time to catch up.

• Go back through credit card and bank statements.
• Flag any business-related costs.
• Add notes or receipts now so you’re not guessing in December.

6. Should You Reevaluate Your Income Streams?

Absolutely. Are some clients behind on payments? Are certain gigs draining your time with little return?

Mid-year is the time to assess:

• Are you pricing your services correctly?
• Could you add a new income stream?

Some 1099 earners are increasing income with non-clinical side businesses. You might find inspiration there.

7. What If You’ve Earned More or Less Than Expected?

That changes everything. If you’ve earned significantly more, you might owe more in taxes than you planned for. If less, maybe you’re overpaying.

Either way:

• Recalculate your estimated taxes.
• Adjust savings contributions.
• Meet with a tax advisor to recalibrate.

8. Should You Open a Business Bank Account Now?

Yes. It’s never too late.

• Keeps personal and business expenses clean.
• Makes deductions easier to track.
• Helps if you ever get audited.

If you haven’t already, do it before the second half of the year.

9. What About Retirement Contributions?

Many 1099 earners skip this step mid-year, but you shouldn’t.

• SEP IRA: You can contribute up to 25% of net earnings
• Solo 401(k): Higher limits, but setup is more involved

Both offer tax deductions now and future retirement savings. This is smart mid-year planning.

Related: Doctor Tax Saving Strategies 2025

10. Can You Still Set Up a Retirement Plan Mid-Year?

Yes. And doing so now gives you more months to contribute. That means more flexibility and bigger potential deductions.

A tax advisor can help you compare options, especially if you’re unsure how much you’ll earn by December.

11. Should You Be a Sole Proprietor or S Corp?

If you’re earning consistently over $80K+, it may be time to explore S Corp status.

• You could reduce self-employment taxes.
• You can pay yourself a salary and take distributions.

There are pros and cons, and this guide breaks them down clearly.

12. Can a Tax Advisor Still Help This Late in the Year?

Absolutely. In fact, now may be the best time. Why?

• There’s still time to change course.
• They can review your payments, deductions, and entity structure.
• Advisors can uncover tax-saving opportunities from market losses and business risk strategies.

Consider exploring captive insurance and private insurance strategies if you’re growing.

13. How Should You Organize for the Second Half of the Year?

Start with small wins:

• Automate your estimated payments.
• Block monthly admin time on your calendar.
• Use a spreadsheet or expense tracking app.

If you haven’t yet, read up on private insurance tools and self-insurance strategies for additional ways to protect your income.

14. When Should You Schedule a Tax Planning Session?

Now. Don’t wait until October or later. Early mid-year planning allows for real changes—not just damage control.

FAQ

Q: Is estimated tax mandatory for 1099 earners?
Yes. If you expect to owe $1,000 or more for the year, you must make quarterly payments.

Q: Can I switch from sole proprietor to S Corp anytime?
You can, but there are deadlines to elect S Corp status. Talk to a tax professional ASAP.

Q: What happens if I underpay mid-year?
You could face penalties, but they’re often manageable with corrective action.

Q: Can I deduct a business trip if it’s also partially personal?
Yes, but only the business-related expenses are deductible.

Q: Do tax advisors really save you money?
Yes—especially when they catch deduction opportunities or help you restructure your business.

Before you coast into the second half of the year, take a few hours to clean things up, talk to an expert, and plan ahead. Mid-year is a checkpoint, not just a pit stop. What you do now can shape how the rest of your year unfolds.

If you’re earning 1099 income, treat this like a business. Because it is one.

Visit contact physiciantaxsolutions.com to schedule a consultation and learn how we can help you take control of your tax strategy today.

This post serves solely for informational purposes and should not be construed as legal, business, or tax advice. Individuals should seek guidance from their attorney, business advisor, or tax advisor regarding the matters discussed herein. physiciantaxsolutions.com assumes no responsibility for actions taken based on the information provided in this post.