What You Need to Know as a 1099 Agent

As an agent with AO, you are considered a contracted worker and receive a 1099 at the end of each year instead of a W-2. This means no taxes are automatically taken out of your paycheck — you’re responsible for tracking and paying your own taxes.

Plan Ahead

Because of the income potential in this role, it’s important to plan ahead and protect yourself by setting aside a portion of your earnings each time you're paid.

A good rule of thumb:

• Set aside 20–30% of your commission pay (especially bonuses and advances)
• Consider using a separate savings account just for taxes so you’re not caught off guard at tax time. You can open a HYSA (high yield savings account) at an online bank, which usually has interest rates of 3-5% so your money earns while in there.
  • I use UFB Direct Bank, but you can google others.

Keep Track of Expenses

As a 1099 agent, you may be able to write off business-related expenses such as:

• Your second work phone line
• Office supplies
• Office space pr a portion of your home
• Travel and meals (if work-related)
• Continuing education or licensing fees

It’s a good idea to keep basic records and receipts throughout the year. Even just keeping a folder or spreadsheet can make a big difference come tax season.

Talk to a Tax Professional

Every person’s tax situation is different — especially when you start making higher income. Once you’re earning consistently, it’s smart to consult a tax professional or accountant who works with 1099 earners. They can help you maximize deductions, stay compliant, and avoid surprises.