Once you have all the necessary information, you’ll need to put it where it belongs. 1099-K forms sometimes come in doubles and if that is the case for you, just combine the numbers on these forms before recording them in their respective locations. If you have not received your summaries by the end of January, reach out to your gig platform about filing taxes. It will include your gross earnings, operating and vehicle expenses, and non-ride earnings, such as bonuses. This doesn’t get filed but can help you iron out the details of your tax return. You’ll get one of these if you made at least $600 during the year from the list provided by the IRS. ![]() ![]() The Form 1099-NEC doesn’t replace Form 1099-MISC as it’s still around to report miscellaneous income like tips and bonuses. This form cannot be downloaded online and must be ordered from the IRS website or filed using the FIRE system. It’s a new way to report self-employment income, taking place of what you would typically report in box 7 of Form 1099-MISC. Introduced by the IRS in 2020, the Form 1099-NEC is for reporting independent contractor income – officially termed “non-employee compensation”. Depending on where you’re located, you may receive a 1099-K for earnings below $20,000. Some states have lower income thresholds. You’ll get one of these if you had 200 or more transactions during the year and reached at least $20,000 in earnings. Form 1099-KĪ Form 1099-K tracks self-employment income made with a payment card, like a debit or credit card. For example, most freelancers won’t receive any tax forms from their contracts on Upwork and it will be your responsibility to report this income on your tax return. If you work for a different gig platform, you should look into whether or not they will send you the appropriate forms. ![]() If you do not receive a form, it’s likely because you did not earn enough during the fiscal year. Rideshare companies like Lyft and Uber are required to send out the correct forms to each independent contractor. You’ll use your 1099 forms to fill out your Form 1040. The first step is to get your 1099 forms and tax summaries. This is why we always recommend keeping a regular log of your business income and expenses. While filing taxes as an independent contractor will be relatively the same for all, whichever form you will have to use is dependent on your earnings this past year. This is why when filing taxes (1099), independent contractors such as Uber drivers will need to take matters into their own hands. In other words, they facilitate financial transactions between consumers and business owners, otherwise known as independent contractors. Many gig platforms, if not all, consider themselves “third-party payment processors”. How to File Taxes as an Independent Contractor You will need to familiarize yourself with the following forms:ĭon’t worry, we’ll go into each one with more detail and how to go about completing each one. Although the learning curve is a little steep, it’s easily mastered with the right guidance.īefore you can start the filing process, you will need to understand how to prepare the tax returns for Uber drivers or any other gig, along with what forms are required. For the self-employed, it’s quite a different story.įiling taxes (1099) as an independent contractor requires different tax forms, several extra steps, and most of all, an understanding of your gig income and how you track it throughout the year. This desire clocks in most noticeably once tax season comes around as many independent contractors start preparing everything they need to file their taxes.įor those with more conventional streams of income, the burden of constant revenue maintenance is almost invisible as expenses are managed by employers, the IRS takes what’s theirs, and one tax form gets filed in the end. With the growth and rising opportunities in the gig economy, a better understanding of financial management is in high demand. Whether you have just completed your first year as an independent contractor and you need guidance on filing your taxes, or you’re a seasoned worker looking for a refresher. ![]() Filing Taxes: 1099 Forms Every Independent Contractor Should Know About
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