How To File TaskRabbit 1099 Taxes The Easy Way And Not Miss Out On Write-Offs
If you're looking for a guide to your TaskRabbit 1099 taxes, you've come to the right place. Being a Tasker is great. You set your preferred rates, decide what gigs you take, what clients you work with. However, this freedom comes at a cost: you're going to handle your taxes yourself.
That's why we've put together a step-by-step guide you can follow, covering everything you need to know so you'll avoid fees and other unpleasant surprises.
By the end of this article, you'll be able to file your TaskRabbit income taxes with confidence and claim all of your write-offs, so you won't overpay when Uncle Sam comes to claim his part!
We get it, taxes are complicated. We've cut through the clutter and picked exactly what you need to know! When you understand these few fundamentals, you'll be able to file all of your 1099 income easily. And the best thing is, it doesn't really matter if it's from DoorDash, Uber, Airbnb, Lyft, or any other contracting you're doing.
- How Is Your 1099 Income Taxed
- Self Employment Tax
- Quarterly Taxes
- Filing Your Taxes
Now, let's explore how TaskRabbits 1099 taxes actually work. Keep reading, it will all make sense in a few minutes.
How Is Your TaskRabbit Income Taxable
You must pay taxes on your TaskRabbit Earnings. By January the 31st, TaskRabbit files all of their contractors' and taskers' earnings to the IRS. You can therefore expect to receive a Form 1099-K or 1099-NEC at the beginning of the year. When you work for TaskRabbit, you're not a regular W2 employee, but a contractor. Unlike regular W2 employees, as a contractor, your taxes are not withheld and you are responsible for filing them yourself. That's why at the end of the tax year, you'll receive a 1099 form that documents your income.
TaskRabbit 1099 Forms Breakdown
If you've made income as a tasker last year, you'll receive a 1099 tax form, and a copy of the form is sent to the Internal Revenue Service aka. the IRS. The 1099 form you've received, is for you to keep in your financial records and documents your taxable income. When tax season comes, you're going to fall in one of three categories.
If you made more than $600, you'll receive a form 1099-NEC, short for Non-Employee Compensation. To those familiar with contracting and freelancing, Form 1099 misc is getting replaced by 1099-NEC, starting 2020.
If you had more than 200 transactions and earned more than $20.000 last year, you'll receive a form 1099-K.
If you made less than $600 through TaskRabbit, you won't receive a 1099-form. However, your income is still reported to the IRS, so you must file it still.
To find out exactly how much of your income is taxable, you'll need to find the total income you've made as a tasker in the last tax year.
How to find your transaction history
Regardless if you've received your 1099 tax form or not, you can download your transaction history over the last year through the app.
Follow these steps to get your transaction history.
- Open the app and enter the My Business menu
- Click on the month you're in
- At the top left, click on the download button and select the last calendar year.
- Choose to send a PDF version to your Email.
- Once you've received your transaction history, open it and look for total earnings. That's your taxable income.
Now that you have your total earnings, it's time to calculate your taxes. The easiest way to do this is using our free online self-employment tax calculator. At Keeper Tax, we simplify taxes for gig workers, freelancers, independent contractors, and small business owners. Our service not only keeps track of your taxes but also helps you find all of the write-offs, so you won't overpay taxes again!
The next step is to find out how much you're getting taxed.
When you're a tasker, uber driver, or DoorDasher, you're a part of the emerging gig economy. You are essentially self-employed and play by different rules than regular W2 employees. As self-employed, the IRS sees you as a business and an employee, meaning you'll have to pay both parties federal taxes total of 15.3%. 12.4% for social security and 2.9% for medicare. This is known as the Self-employment tax.
You also need to pay your income taxes. They depend on where you live, your marital status, and your income tax bracket. Calculating it yourself can be a bit complicated, therefore you can use your income tax calculator and make things easier for yourself.
In case you expect to owe more than $1000 in taxes, you must pay your estimated taxes on a quarterly basis. Divide the total amount of your total amount of taxes by 4 and you should know how much you need to pay every quarter.
The due dates are as follows:
Q1 - April 15.
Q2 - June 15
Q3 - September 15
Q4 - January 15
Use Form 1040-ES to file your quarterly taxes.
Note that the payments are estimates, which means that if you overpay in quarterly taxes, you can get a return of your payments and if you underpay, you'll be hit with a tax bill at the end of the year. So, If you're going to owe more than $1000 in taxes per year, use our quarterly tax calculator to find out how much you should pay.
However, being a worker in a gig or sharing economy comes with a big advantage:
All of the business expenses you come across can be fully or partially deducted from your income before you pay taxes. It's a big advantage and you should use it to your best ability. Since you are an independent contractor at the end of the day, you are literally paying yourself first, and pay the IRS, whatever is left!
The equipment you need to do your business is deductible, as well as any other expenses you come across when you are working. Some of them are:
- Car and mileage expenses
- Drills, tools, and hardware
- Subscription services needed for your work
- Advertising expenses
- Entertainment expenses for your work such as a Spotify subscription
You need to save your receipts, transaction records and keep them for 3 years, either manually in big file cabinets, or you can do it digitally. At Keeper Tax, we store all of your expenses digitally and organize them for you. A tax professional will be assigned to your account and keep an eye on things, making sure everything runs smoothly.
With all the fundamentals covered, let's get the taxes filed.
Filing Your Taxes
When you understand what we've just covered, filing taxes as a contractor is not that hard. At first, you are going to need a couple of tax forms. To be exact, you'll need Schedule C, Schedule SE, your Form 1099
Here, you must list all of your write-offs. Start with the total income from your form 1099. Go through the process of filling it out and in the end, you'll end up with your net income (gross income minus business expenses). That's the amount you'll pay taxes on.
On this form, you must calculate your self-employment tax, meaning how much you must pay in taxes federal taxes.
How to file your TaskRabbit income taxes
It's advised to file your 1099 taxes with your other tax returns, regardless if you file through mail or the IRS website www.irs.gov. If you file taxes by mail, remember to postmark them on or before the due date you send them, usually before April the 15th. Don't forget to include your payments when you file them!
Filing taxes may seem intimidating at first. But once you understand the basics and use the tools available to you, it's not that hard. The good thing is that once you understand the 1099 TaskRabbit taxes, is that you can use the same method to file all of your 1099 forms yourself, no matter if it's Uber, Lyft, DoorDash, Postmates or anything else.
Set yourself up for tax time success today and never miss a write-off again. Keeper Tax monitors the credit card in real-time, keeps your books organized for you, and looks for any write-offs available to you. On average, our clients save an additional $2000 per year and discover write-offs nobody told them about. When the tax season comes, you can effortlessly file your taxes through Keeper Tax directly or print a well organized financial rapport that you can give to your accountant. Try Keeper Tax today and start doing taxes the smart way!
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