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These articles first appeared on a blog called The Dirtbag Way.

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These articles first appeared on a blog called The Dirtbag Way.

The Dirtbag Diaries: The Modern Dirtbag

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Dirtbag Diaries LogoBy the end of the day, I came to a conclusion: this question, about what it means to be a dirtbag and whether or not dirtbagging is dead, it misses the point. Things change, the world evolves, and everyone holds their own nostalgia for the good old days. For me, it’s simple. I think dirtbagging is more of a mindset that somebody carries with them throughout life than a current life situation. I believe if someone places climbing, or any adventurous endeavor, at a premium in their life they will always be, in some way, a dirtbag.
~Matt Van Biene

We could not agree more.

Source: The Dirtbag Diaries: The Modern Dirtbag

These articles first appeared on a blog called The Dirtbag Way.

Journey to The Stikine and The Sacred Headwaters

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Expedition kayakers from around the world have long made the late summer pilgrimage to test themselves on the 45-mile, big-water gauntlet that is the Grand Canyon of the Stikine. But, points out Brendan Wells—checking in from a paddling expedition in Ecuador—few paddlers know of the fight to protect the vast watershed from development.

Brought to you by Mountain Mind Collective.

These articles first appeared on a blog called The Dirtbag Way.

Tax Season Lessons: Independent Contractor Income

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1099 Tax FormIt’s tax day everyone. This is the time of year when I’m normally dreaming about how to best enjoy my refund. Not this year. This year I am writing checks instead of receiving them. Nearly $1000 just disappeared from my bank account. Why? Independent contractor income.

In 2014, I spent a little under a month total working as a bicycle tour guide. This has been about average for me over the past few years. I work these tour as an independent contractor. As such, the checks I receive from the company have no taxes or social security contributions taken out of them. At the end of the year, instead of a W–2, I receive a 1099-Misc Income form listing my compensation for this work. It is my responsibility to pay what would have been automatically deducted from this income had I been an “employee” of the company.

I recently learned that the tax rate for 1099-Misc income is 25%! This rate is 10% higher than the tax bracket that my total household income falls under. In other words, the work I do as a bike guide gets taxed as if I make a far greater annual salary than I do. Ouch.

Most years this has not been a problem. I think that’s just been luck. I’m guessing the payroll deductions from my other income made up for the difference and still left enough overpayment to receive a refund. That was clearly not the case this year.

As I set out on a new adventure in 2015, I will be working a lot more as an independent contractor. I’m not going to leave it up to luck this year and hope that there’s not a big bill coming due again next April 15th.

Here’s what I’m going to do:

  1. Keep an envelope and mileage log in my car and track every mile and meal I buy traveling to and from my work assignments. These items can be classified as business expenses and in 2014 reduced my 1099-Misc taxable income by $790.
  2. Continue to deposit my paychecks into a high yield savings account
  3. Take 25% of each of these paychecks and put them into a separate high yield account called Taxes
  4. In six months, assess how much money I’ve made as an independent contractor in 2015 and how much I think I’ll make over the course of the rest of the year.
  5. Based on this assessment, decide if I need to pay estimated earnings taxes out of my Taxes account.
  6. In April, use the money in my Taxes savings account (which has been making a little extra money for me in the mean time) to pay the taxes I will owe.

Though this has not been a pleasant experience, I have learned my lesson and will be more diligent about my tax responsibilities as an independent contractor from here on out. The freedom of picking up work that I want to do when I want to do it is worth the cost of having to do a little more financial management.

Do any of you have experience dealing with 1099-Misc income?

Any tips you would like to share about how to manage taxes?

My partner Justinn here at The Dirtbag Way is also not enjoying tax season, but for an entirely different reason. Read her post to learn more.

Tax Season Lessons: The Affordable Care Act