10 Essential Financial Planning Questions Business Owners and 1099 Workers Should Ask Themselves

Running a business or working as a 1099 independent contractor offers flexibility, opportunity, and autonomy. But it also introduces a layer of complexity that can blur the line between personal and professional finances. Whether you're just starting or have been in business for years, it's worth revisiting how your business activity impacts your long-term financial health.

Here are ten key questions to help you evaluate the strength of your financial strategy:

1. Is your personal financial foundation solid?

Fluctuating income and unpredictable expenses can make it harder to stick to a budget. That’s why having a larger-than-average emergency fund is essential. Review your personal spending plan regularly and ask: Are you unintentionally subsidizing business shortfalls with personal funds? If so, it’s time to realign the boundaries between business and personal cash flows.

2. Are you managing your taxes proactively?

Unlike traditional employees, business owners and contractors are responsible for estimating and paying quarterly taxes. But tax planning isn’t just about writing checks every few months. It’s about making strategic decisions throughout the year. Are you maximizing business deductions? Should you accelerate depreciation or spread it out? Are your estimated payments aligned with your current income and deductions? A few adjustments here can prevent bigger surprises at tax time.

3. Is your business structure still working for you?

Many people choose an LLC or S-Corp when they start, but rarely revisit the decision. As your business matures, it’s worth reassessing. An S-Corp might help reduce self-employment taxes through distributions. A C-Corp could let you reinvest profits at a lower corporate tax rate, but it also brings double taxation. Are you balancing liability protection, flexibility, and tax efficiency?

4. Have you optimized your retirement contributions?

The right retirement plan can be a powerful wealth-building tool. Have you outgrown your SEP IRA? Could a Solo 401(k), profit-sharing plan, or cash balance plan help you save more? Hiring your spouse as a legitimate employee may even allow for additional retirement contributions—just be sure their role is bona fide and adequately documented.

5. Are you protected against the risks unique to business owners?

Standard life and disability insurance policies may fall short for business owners. If your income is variable or you’re essential to daily operations, your coverage might not reflect your actual risk. Review whether your policies account for lost income, succession planning, or buy-sell agreements. The proper protection can help both your family and your business stay afloat if something happens to you.

6. Are you on track with succession or exit planning?

Many business owners delay exit planning because they’re focused on today. But waiting too long can limit your options. Do you have a clear plan for who will run or buy your business if you step away? Have you thought through valuation, transfer options, or family dynamics?

7. Are your personal investments properly diversified?

It’s easy to overinvest in your own business, financially and emotionally. But that can create concentration risk. Ask yourself: If something went wrong in your business, would your entire net worth be at risk? Diversifying with outside investments can bring more stability and peace of mind.

8. Are you taking advantage of industry-specific opportunities?

Some industries offer unique tax credits, deductions, or insurance solutions. Are you aware of the ones that apply to your business? A quick conversation with a knowledgeable CPA or advisor could uncover valuable savings or protections you didn’t realize you qualified for.

9. Are you thinking like a lender or investor?

Securing a mortgage or personal loan can be harder when you’re self-employed. Lenders want to see consistent income and clean financials. If you’re planning a major purchase, think ahead: Do you need a larger down payment? Should you structure your tax filings more conservatively for underwriting purposes? Would adding your spouse to the application help?

10. Are your personal and business goals aligned?

Your business should support your broader life goals, not the other way around. Take a step back and ask: Are you building something that brings you freedom, security, and purpose? Or are you stuck serving a business that no longer serves you?

Final Thoughts

Being a business owner or 1099 worker means juggling many roles. But you don’t have to do it alone. Working with a financial advisor who understands both your business and your personal goals can bring clarity, strategy, and peace of mind.

WHWM is here to guide you in identifying your priorities, developing a plan, and making adjustments along the way. By choosing WHWM, you're partnering with our Founder and President, Stephen Bodwell. As a CPA and CFP® professional, Stephen is committed to helping you achieve your financial goals and aspirations. Don't hesitate to take the next step toward realizing your dreams. Schedule your complimentary, no-obligation 30-minute consultation with Stephen. 

Walnut Hill Wealth Management, LLC (“WHWM”) is a registered investment advisor offering advisory services in the State of Texas and in other jurisdictions where exempt. The information provided is as of the date indicated and is subject to change.