Filing GrubHub 1099 Taxes Made Easy: A Guide For Independent Contractors
Working as a Grubhub 1099 contractor is exciting and comes with a lot of freedom. It's entirely up to you if you do it part-time or as a full-time job, just like Uber Eats, Lyft, DoorDash, Instacart Postmates, and other delivery services. You also get to decide what deliveries you take and ultimately how much money you make.
As great as it sounds, this freedom comes at a price: You have to file and pay taxes yourself.
Some gig-workers and independent contractors have it sorted out, but for many, tax season is stressful. If you’re among the latter, you've come to the right place! At Keeper Tax, we help independent contractors, gig workers, and small business owners take care of their taxes, find write-offs, and stay on top of their finances.
By the end of the article, you'll know everything you need about GrubHub 1099 forms, how to file taxes, and what you can write-off.
Self-Employment Taxes 101
When you drive for GrubHub, the IRS considers you as self-employed, meaning they see you as a business and an employee at the same time. Therefore, your taxes aren't withheld and you are responsible for filing and paying them yourself. You have to pay both the employer as well as employees portion of FICA taxes, social security and medicare taxes, totaling 15.3%, also known as self-employment tax.
On top of that, you must pay federal and state income tax. How much you must pay, depends on what state you live in, marital status, and tax bracket. It can be quite tricky to calculate your taxes, so we recommend using our 1099 tax calculator for this.
I know, it sounds terrible, but being self-employed comes with a big advantage: Tax deductions. Keep reading, we'll get to that in a minute. In the next section, you’ll discover how taxes work when you drive for GrubHub.
GrubHub Drivers' 1099 Forms
By January 31st, Grubhub will send 1099 forms to all their independent contractors and delivery drivers, who received more than $600 in the last calendar year. This form documents your income, and according to the US law, GrubHub sends a copy of your 1099 to the IRS.
Grubhub sends their tax forms by mail, but due to Covid 19, the mail can be delayed. Instead, we recommend you get your 1099 form in the app.
To get your tax forms digitally:
- Open the app
- Open the menu and go to Personal Info
- Go to Tax Information and click "Send my 1099 form electronically"
When you have chosen to receive your tax forms electronically, you will be able to view and download your 1099 forms directly in the app, as soon as they get filed.
1099-NEC and 1099-K
If you've made more than $600 last year, GrubHub will send you a form 1099-NEC where you can see the money you've made on the platform. The new NEC form is replacing the previous form 1099-MISC for non-employee compensation.
Maybe you’ve been busy, made $20,000 and over 200 transactions. Then you’ll receive a 1099-K. Vermont and Massachusetts are an exception. If you made over $600 during the last calendar year, you will get a 1099-K instead of NEC.
What if I didn't get a 1099 form?
If you make less than $600 as a non-employee, Grubhub won't send you a 1099 form. It's a common misconception that if you made less than $600, your income isn't taxable. It absolutely is, and the IRS will be thrilled to penalize you for missing it. Don’t give them the pleasure, file it, and avoid fees and interests!
What do I do with my GrubHub 1099 form?
The tax information from your 1099 form must be filled out on Schedule C. On it, you document your profits and losses from your business and find your taxable income. To find your taxable income, you must first deduct all of your business expenses.
On schedule SE, you calculate your self-employment tax.
Schedule C and SE must be filed at the same time as your other tax forms by April 15.
But to find your taxable income and how much you’re going to pay, you must first write off all your business expenses.
What Write-offs Can I Claim?
Simply explained: Any expense you come across when you’re working on your business, can be deducted from your taxable income before paying taxes. They can significantly lower your taxes because you are only paying taxes on what’s left after your expenses!
Write-offs like gas, car maintenance, phone bill, and many more are available to you as a delivery driver, but to use them, you must keep a detailed record of all your expenses. Otherwise, you might get in trouble if you get picked for an IRS audit.
As a delivery driver, you can deduct:
- Gas expenses and mileage
- Parking fees and tolls
- Car payments and insurance
- Partially your phone bill
- Accessories such as chargers needed for work
- A bike
- Transportation maintenance expenses
Keeping track of your expenses, saving the receipts, and typing them up in expense tracker excel sheets can be tedious. In 2021, it’s a lot easier to use automated software like Keeper Tax to track all your expenses, find write-offs, and file your taxes directly.
After calculating your federal taxes, you might discover that your taxes are above $1000. If it happens, you’re going to pay your taxes quarterly.
If you expect to owe more than $1000 in federal taxes, you must pay estimated taxes quarterly. Missing the quarterly payments will result in fees and interests, so it’s best to play it safe. Luckily quarterly taxes are easy to estimate if you use our quarterly estimated tax calculator.
The due dates are:
- Q1 - April 15
- Q2 - June 15
- Q3 - September 15
- Q4 - January 15
No matter if you drive full-time for GrubHub or as a side-hustle, it's in your best interest to make the most money of the time you spend on it. Knowing how to file your taxes can free you from a lot of stress and write-offs can save you a lot of money. Following these Grubhub tips could help you maximize your revenue as well.
Hopefully, this guide answers your questions about GrubHub 1099’s, but if you have questions, always consult a professional.