Keep More of What You Earn: 1099 Tax Strategies for Door-to-Door Reps

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TLDR

If you’re a 1099 door-to-door rep, the tax code can work for you—when you track expenses, choose the right entity, and use proven strategies like HSAs, hiring your kids, and the Augusta Rule. This recap of our webinar with Tommy from Prime Corporate Services turns complicated rules into simple, actionable steps you can implement before year-end.

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“It’s not what you make, it’s what you keep." That was the drumbeat of our live session with Tommy from Prime Corporate Services, who has helped launch 170,000+ businesses since 2012 and leads a 450-person team focused on entity structure, tax prep/strategy, estate planning, and business credit. Below is a practical, plain-English guide for door-to-door and field sales pros to keep more of every commission check.

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Why Q4 is the perfect time to act

Break your year into quarters (Q1–Q4). Going into Q4, you still have time to:

• Capture missing deductions
• Adjust your entity election (where eligible)
• Implement year-end strategies (HSA funding, Augusta Rule meetings, etc.)

Even if you’re behind, don’t be embarrassed. Tommy’s team sees everything from first-time filers to six-figure earners who are catching up. The key is to start.

Step 1: Choose the right entity (and bank account)

At minimum, form an LLC to show business intent and separate your finances.
If you typically net $20k–$40k+, ask your accountant about an S-Corp election (LLC taxed as S-Corp or an S-Corp). Why? S-Corps allow reasonable salary + distributions and can reduce self-employment tax (Medicare/Social Security) on the distribution portion, often ~7% savings on that piece.

Do this immediately:

• Open a separate business bank account
• Use a designated credit card for business expenses

Step 2: Track every dollar (this alone saves thousands)

From 50,000+ returns, the Prime team found that clients who consistently tracked expenses saved an average of $9,300/year. Don’t rely on memory.

Easy tools Tommy recommends:

• QuickBooks (includes mileage tracking)
• Keeper Tax (links cards/accounts and texts you to categorize daily)
• Stride (simple expense tracking)
• MileIQ (if you prefer a dedicated mileage app)

IRS lens for deductions: Ordinary, necessary, helpful, appropriate. If an expense meaningfully supports your income, track it.

Commonly missed partial write-offs:

• Home office (dedicated space): a portion of rent/mortgage, utilities, internet, pest control, landscaping tied to the office’s professional upkeep
• Phone and internet
• Travel and meals (with rules: solo meals typically require travel context)

Step 3: Year-end tax moves to consider now

These three can be implemented before December 31:

1) Health Savings Account (HSA)

If you have a high-deductible health plan, ask your insurer about HSA eligibility. 2025 limits mentioned in the webinar: $4,300 (single) and $8,550 (family).
Why it’s powerful:

• Contributions are deductible
• Funds can be invested tax-free
• Qualified medical withdrawals are tax-free

2) Put your kids on payroll (real work, real documentation)

If your kids are under ~17½ and perform bona fide work (e.g., modeling in marketing materials, social media help, office tasks), your business can pay them at a reasonable market rate. Payments up to the applicable standard deduction level may result in no income tax for the child, while your business gets a deduction. (Tommy used a modeling example from the webinar.)

Keys to do it right: job description, time sheets, portfolio/examples if applicable, and payment records, just like any other employee.

3) The “Augusta Rule” (Section 280A)

You can rent your home to your business for up to 14 days per year, and:

• Your business deducts the rent
• You don’t report that rent as personal income (for those days)

Practical use: host monthly team meetings, recruiting events, planning sessions. Draft a simple rental agreement, document dates/agenda/photos, and pay the rent from the business to your personal account.

Vehicles & mileage: pick your path

You generally have three options:

1. Section 179/bonus depreciation (often for vehicles >6,000 lbs used primarily for work)
2. Actual expenses (gas, insurance, maintenance, car washes) multiplied by business-use %
3. Standard mileage deduction (track business miles; rate set annually)

For door-to-door reps who drive a lot, mileage can be huge, just document it.

Build business credit (separate from your personal)

You have a legal name, SSN, and a personal FICO score. Your business has an EIN and can build a PAYDEX score (1–100) with 80+ signaling strong payment performance to lenders. Benefits include:

• Higher limits and often lower rates than personal cards/LOCs
• Liability separation between business and personal
• More options to fund growth (marketing, equipment, inventory)

Foundations: consistent business identity (legal name, EIN, professional email/phone/address), trade lines that report, on-time payments.

Protect what you’re building (estate & entity design)

As your income streams grow, don’t commingle everything. Keep active 1099 income separate from assets like rental properties (often via dedicated LLCs) to segment liability and clarify P&L.
Put estate planning on your roadmap: trust, will, living will, powers of attorney.

When forming or revisiting your setup, weigh:

1. Privacy & protection needed today (and as net worth grows)
2. Tax impact (profit/loss treatment now and long-term)
3. Credibility with banks, vendors, and customers

How much should you set aside for taxes?

As a rule of thumb, 20–30% of profit. Better yet, know your profit: income minus expenses. With accurate tracking, you can confidently decide whether to invest in assets (e.g., rentals) or other strategies instead of overpaying the IRS.

Quick-start checklist (do these this week)

• Confirm your entity (LLC) and ask your CPA about an S-Corp election
• Open a business bank account and use a designated card
• Install QuickBooks (or Keeper/Stride) and start categorizing
• Turn on mileage tracking (QuickBooks or MileIQ)
• Evaluate HSA eligibility and fund before year-end (if applicable)
• Draft a home rental (Augusta Rule) template for monthly meetings
• Create kid-employee documentation (if appropriate)
• List your top 10 recurring expenses and tag each as deductible/not sure (ask a pro about the “not sure” group)
• Begin business credit setup (EIN, D-U-N-S, reporting vendors, on-time pay)
• Put estate planning on your 6–12 month roadmap

Partner spotlight: Prime Corporate Services (from our webinar)

Since 2012, Tommy’s team has helped entrepreneurs with entity formation, bookkeeping, tax prep/strategy, estate planning, and business credit. They recently launched a “decoder” that analyzes your tax return and surfaces 10–20 missed strategies with reported savings ranging from $10k to $200k, depending on circumstances.

Final word

Track your expenses, separate business/personal, and implement one to three new strategies this year. Do it once, do it right and it becomes part of who you are as a business owner.

Disclaimer: This article is for educational purposes and isn’t legal, tax, or accounting advice. Consult a qualified professional for your specific situation.

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