1099 Contractor who did not put money aside for taxes…what do I do?
1099 Contractor who did not put money aside for taxes…what to do?
Hi all,
I was hoping to get some advice from others who have been in a similar situation. I was a 1099 contractor in 2023-2024 and I did not put away money for taxes. I know I should have researched the proper way but I just got busy with life and payments and kept moving forward. Now, I lost my job back in November 2024 and have been putting off calling IRS because I know I owe taxes. It’s about 7k I think and I’m not sure how to go about it since I defintely don’t have the expenses to take care of it.
I’ve looked up Optima but heard they are a scam. How have others gone about getting help with back taxes in a legitimate way that also doesn’t make you go broke? Also, were you able to come up with a solid payment plan? Thanks!
Here’s a clear and practical guide you can follow if you were a 1099 contractor who didn’t set aside money for taxes and now owe the IRS:
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💼 What To Do If You Didn’t Save for Taxes as a 1099 Contractor
If you worked as an independent contractor and didn’t set aside taxes, you’re not alone — and it’s completely fixable with the right steps. Here’s how to take control before penalties snowball.
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🔹 Step 1: File Your Taxes (Even If You Can’t Pay Yet)
Never skip filing just because you can’t afford to pay.
• Filing prevents “failure-to-file” penalties, which are much higher than late payment penalties.
• You can file on your own or work with a tax professional (CPA or EA).
• If you haven’t filed 2023 or earlier, do it ASAP — the IRS won’t consider any relief until you’re current.
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🔹 Step 2: Find Out Exactly How Much You Owe
Log in to your IRS account online to see:
• Your exact balance (including interest and penalties)
• Which years are unpaid
• Any collection notices issued
This will help you decide which IRS program fits your situation.
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🔹 Step 3: Choose the Right Resolution Option
🧾 Option 1: Payment Plan (Installment Agreement)
If you owe $50,000 or less, you can usually qualify for a payment plan directly online.
• The IRS lets you stretch payments out for up to 72 months.
• No need to submit financial documents for basic plans.
• Payments are auto-drafted monthly.
💸 Option 2: Temporary Hardship (Currently Not Collectible)
If you’re unemployed or struggling to pay basic living expenses, the IRS can pause collection.
• Interest still accrues, but they stop garnishments and levies.
• You’ll need to show financial hardship through a budget and income verification.
🧮 Option 3: Offer in Compromise (Settle for Less)
If you truly can’t pay what you owe, the IRS may accept a settlement for less than the full amount.
• Approval odds depend on your income, assets, and expenses.
• A legitimate tax relief company or CPA (like US Tax Relief) can help calculate your realistic settlement.
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🔹 Step 4: Avoid Scams
Companies like Optima Tax Relief and others often promise results they can’t deliver.
Here’s how to spot legitimate help:
✅ Real professionals have licensed CPAs, EAs, or tax attorneys.
✅ They discuss your case specifics — not one-size-fits-all promises.
✅ They don’t demand full payment upfront before filing your paperwork.
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🔹 Step 5: Get Professional Help — Without Going Broke
If you’re unsure what to file or which plan to choose, contact a licensed expert who specializes in IRS tax resolution.
At US TAX RELIEF, our CPAs help contractors, self-employed workers, and small business owners negotiate directly with the IRS.
We’ll help you:
• File missing returns
• Stop IRS collection letters
• Negotiate payment plans or settlements
📞 Call 1-844-4-IRS-FIX
🌐 Visit www.TaxReliefProgram.org