The 1099 Economy – Get your tax moves down now!
If you have a number of part-time jobs through the use of internet tools like Uber you will need to make sure you understand your tax obligations. Waiting until the year is over will be too late.
With the move towards the Gig economy many more taxpayers are working for others on a part-time basis. So whether you are picking up a few dollars driving for Uber or are delivering meals for a local restaurant here is what you need to know.
Employee or contractor? Determine if your employer is considering you one of their employees (W-2) or as a Form 1099 independent contractor. Be prepared. Most of these jobs will treat you as an independent contractor.
Over $600. When you earn $600 dollars or more you will receive a Form 1099 informational tax form at the end of each year.
Estimated taxes. You will need to send in your own Social Security, Medicare, and estimated income taxes. You will need to do this periodically or could face tax penalties when you file your tax return. For most independent contractors, a payment is required every three months by filing quarterly estimated payments.
Unemployment taxes. You will also need to be prepared to file necessary payroll reports and pay any applicable employment related taxes.
Other items. You will need to provide your own benefits including required health insurance.
Now is the time to ensure you have your tax moves in order for the year. Please call if you need assistance.