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How To File 1099 Taxes Properly (Uber, Doordash, Lyft, Etc.) - YouTube
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so in one of my recent videos talking
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about tax deductions i asked about any
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specific questions that people might
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have related to taxes etc and i had a
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lot of people asking about how to file
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your 1099 taxes properly or specifically
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taxes associated with being a uber
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driver or doing doordash or other
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related services if you haven't seen
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that other video already i'll go ahead
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and put a card up in the corner it
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covers the most important tax deductions
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that freelancers should be aware of now
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generally speaking topics like this
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aren't really covered in school and this
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gig economy is honestly a very new thing
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so there's not too many resources
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available and it kind of leaves a lot of
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people stuck not knowing you know
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exactly what to do not to mention if you
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don't know how these different things
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work related to deductions etc you could
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end up paying thousands of dollars in
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taxes or penalties that you wouldn't
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have to pay otherwise if you were aware
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of this different information now real
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quick guys i just have to mention that i
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am not a tax advisor or a financial
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advisor you know i'm just a guy on the
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internet who has been involved in his
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own businesses for the last five years
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but you should always talk to a tax
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professional about anything related to
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your own tax situation that being said
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let's jump into it and talk about taxes
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related to 10.99 income so just to get
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this out of the way here guys if you
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earn more than 600
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from uber or doordash or any 1099 income
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source that is going to be reported to
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the irs and you're going to have to pay
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taxes on that basically the irs is going
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to get a record of how much money you
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earned from this source so it's up to
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you to also report that and then pay the
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taxes owed on that income if you earn
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less than six hundred dollars they may
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not send a 1099 and it's up to you if
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you report that or not but just
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understand that you are technically
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supposed to report any amount of income
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in order to pay taxes on it however if
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you did get a 1099 you really should
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report that because it's very easy for
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the irs to cross-reference their
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documents versus the ones you've
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supplied and be able to tell if
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something is missing also as a side note
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when working these different gigs one of
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the downsides is that you're usually not
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setting aside any money for your taxes
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so when you work a traditional job you
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typically have you know your base amount
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of pay and then you'll get some benefits
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as well but the amount of money that you
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take home is often a decent amount less
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than what your salary is and that is
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because of the money being set aside for
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things like a 401k maybe but largely
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it's going to be taxes so it's
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definitely recommended to set aside
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around 25
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of all of the money that you're earning
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from 1099 sources to set this aside for
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your tax bill at the end of the year
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however one thing that a lot of people
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don't know either is that you should
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also be making quarterly estimated
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payments based on you know the money
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that you have coming in that you owe
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taxes on now as a business owner myself
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who's been doing this stuff full-time
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for over four years going on five now i
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will tell you that making those
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quarterly payments is honestly a really
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solid idea because it's going to keep
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you better on track for taxes at the end
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of the year a lot of people don't pay
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any estimateds and they don't set aside
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any of their money for taxes and they
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end up getting slammed at the end of the
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year with a very hefty tax bill so if
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you are expecting to owe the irs you
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know a couple grand or more in taxes
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you're supposed to be making quarterly
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estimated payments and those payments
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are due on april 15th june 15th
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september 15th and january 15th for the
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previous quarter now even with the sheer
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number of gig workers out there today
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it's honestly quite astounding how few
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people actually know about this and also
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how few people are even setting aside
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money to pay taxes at the end of the
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year so now that we covered that here
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let's talk about the actual process of
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filing your return and what documents
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you should expect to get from you know
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uber or doordash etc well if you're
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working for uber or doordash you're
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going to be receiving a 1099k
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and possibly a 1099 miscellaneous or
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1099 nec or non-employee compensation
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and of course you're going to want to
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make sure that you're documenting and
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reporting every 1099 that you receive so
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now you have these 1099 forms but where
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exactly are you supposed to report this
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that's actually going to go on schedule
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c of form 1040 on your tax return and
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this is where you report your profits
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and losses from your business this is
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also where you're going to account for
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any deductions related to your business
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keep in mind if you guys want to learn
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more about those there is that video in
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the corner about tax deductions but now
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we're going to cover a couple of
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specific tax deductions related to ride
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sharing or delivery services that you
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should be aware of and just so you guys
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fully understand deductions are
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basically uh expenses related to
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operating this business and then you
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don't end up paying taxes on that dollar
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amount of money so for example if you
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had five thousand dollars of 10.99
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income but then you had a thousand
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dollars of deductions you would only pay
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taxes on four thousand of that five
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thousand dollars so that being said here
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are the key tax deductions to be aware
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of number one is any uber or lyft fees
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or commissions or tolls that are paid
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and this is visible in your dashboard
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typically when using these different
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apps number two if you provide any
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snacks or refreshments for your
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passengers hang on to those receipts
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because you can write that off as well
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number three you are able to write off a
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portion of your phone bill since you are
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required to use your phone for business
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purposes in order to use these different
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um apps to make money now how much of
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that bill you write off is largely up to
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you it's supposed to be about the
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percentage of time you're using that
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phone for business purposes versus you
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know using it for personal or what you
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might decide to do as well if you're
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doing this on a larger scale is getting
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a separate phone just for business
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purposes and then you can do a full
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write-off of that
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phone plan assuming that you're only
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using that phone for business purposes
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if not what a lot of people do is
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they'll write off 50 of their phone bill
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seeing as it's about maybe half the time
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they're using it for business purposes
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versus personal use so the next
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deductions to be aware of are any
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accessories that you may have you know
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put into your vehicle for you know in
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particular ride sharing this could
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include charging cords lights seat
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covers etc and if you have to replace
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any of those again any of those expenses
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can be deductions next up if you are
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using any type of mileage tracking
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software where you have to pay for a
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subscription that can also be fully
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deducted and then lastly on that topic
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of mileage the most important one is the
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standard mileage deduction of 58 and a
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half cents per mile now you are going to
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want to keep a mileage log and you
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should be able to get this from your
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uber app to figure out how many miles
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you've driven for them in a given year
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but you are able to take that deduction
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per mile driven for either uber or any
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of these delivery services now lastly in
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that form 1040 you're going to end up
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calculating your net earnings from
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self-employment by subtracting your
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expenses from your gross income so as
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mentioned earlier you have your total
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income from your you know gig whatever
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you're doing on the side here whether
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it's maybe uber or lyft etc then you
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have your expenses or your deductions
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which come off the top and it's that
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lesser amount of money that you end up
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paying taxes on and this number is going
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to need to be put into schedule s e of
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the same 1040 to calculate your
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self-employment tax now if all of this
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here sounds really complicated it's
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because it honestly really is and don't
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worry you're not alone in this because
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there's literally millions of gig
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workers out there figuring out these
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things at the same time as you and
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obviously as you can see here if
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somebody who is driving for lyft or uber
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is unaware of deductions for example
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they could end up paying a heck of a lot
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more in taxes for no reason so i
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recently partnered with a company called
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thrive which is aiming to basically fill
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this gap here in helping out these
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freelancers and gig workers that are
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popping up all over the place thrive is
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going to be a one-stop shop for all of
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your freelance needs and they're going
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to be offering free automated quarterly
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and annual tax filings on your behalf so
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they're going to be able to help you
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with that whole part of the equation to
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make sure that you're paying in your
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estimated taxes and you're not getting
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hit with penalties or a huge tax bill at
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the end of the year so right now guys
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there is a wait list for thrive if you
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want to check it out the link is down in
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the description below but they're going
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to be offering a ton of awesome services
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geared towards gig workers and
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freelancers helping you with very
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complicated things such as tax
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deductions uh quarterly filings etc but
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anyways guys that's gonna wrap up this
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video those are the basics of filing uh
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1099 taxes properly specifically talking
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about uber doordash etc if you guys
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enjoyed this video make sure you drop a
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like and subscribe to be notified of any
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future videos and again if you have any
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other tax related or business related
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questions where you want me to cover
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that in a future video please leave me a
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comment down in the description below be
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sure to check out thrive and sign up for
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that wait list down in the description
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they're also going to be doing a ton of
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free giveaways for people on that wait
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list so you may want to check that out
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but thanks so much for tuning in guys
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and i will see you in the next video
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