topic Re: Independent Contractor Question in Get your taxes done using TurboTax

Independent Contractor Question

mbl18o — Wed, 03 Feb 2021 22:09:12 GMT

Hello!

My name is Mary Llanes, and I just started working for DoorDash as a dasher. I want to make around $960 a month, and I am unsure if my income is non-taxable income or not. I would like to know so that I can set aside 30% of my revenue for annual tax filing to the IRS if need be, and I would be grateful for any assistance with this. Thank you very much!

Best,

Mary Llanes.

Re: Independent Contractor Question

MinhT1 — Wed, 03 Feb 2021 22:24:27 GMT

As a dasher, you are self-employed and you have to pay income taxes and self-employment taxes on your net income of your business. Net income is gross income received from Dash minus all your business expenses.

As there is no tax withheld for your income, you need to pay estimated taxes during the year.

Please read this TurboTax blog on Beginner's Tax Guide for the Self-Employed and also this TurboTax blog on I Work For a Rideshare Company, How Can I Get My Biggest Tax Refund?

Re: Independent Contractor Question

mbl18o — Wed, 03 Feb 2021 22:30:16 GMT

Hi:

Thank you for your reply. After reading the two articles, I am still unsure how to get started. Is it possible to set up a zoom call between us to discuss exactly what I need to do? I would be willing to pay for your services.

Best,

Mary Llanes.

Re: Independent Contractor Question

ColeenD3 — Wed, 03 Feb 2021 22:53:56 GMT

You can choose to have someone help prepare your return, but the program walks you through the entire process. It provides an interview and takes you to Schedule C, where you can enter your income and expenses.

To set up your business:

Open or continue your return.
Search for schedule c and click the Jump to link in the search results.
Answer Yes to Did you have any self-employment income or expenses?
- If you've already entered self-employment work and need to enter more, select Add another line of work.
Follow the onscreen instructions.

Re: Independent Contractor Question

VolvoGirl — Wed, 03 Feb 2021 22:44:50 GMT

Some general info on self employment...........

You will need to keep good records. You may get a 1099NEC at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small. You might want to use Quicken or QuickBooks to keep track of your income and expenses.

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed return....

http://quickbooks.intuit.com/self-employed

When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

Here is some IRS reading material……

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses

http://www.irs.gov/pub/irs-pdf/p535.pdf

You pay Self Employment tax on $400 or more of net profit from self-employment in addition to any regular income tax. You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire.

Since you don't have taxes taken out like on a W2,

You must make quarterly estimated tax payments for the current tax year if both of the following apply:

- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.

- 2. You expect your withholding and credits to be less than the smaller of:

90% of the tax to be shown on your current year’s tax return, or

100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months).

How to make the Estimated payments

https://ttlc.intuit.com/community/tax-payments/help/how-do-i-make-estimated-tax-payments/00/25875

Re: Independent Contractor Question

mbl18o — Wed, 03 Feb 2021 22:47:13 GMT

Hi:

Thank you and I will look into this. To clarify though, my expected income will be $960 a month. Will I need to set aside 30% and lose that income so that I can pay that to the IRS? I can report everything else including mileage, etc. For the sake of budgeting for the month, I just would like to know for now if my net income will be $960.

Best,

Mary Llanes.