If you are new to being self employed and are acting as your own bookkeeper and tax preparer you need to educated yourself....
If you have net self employment income of $400 or more you have to file a schedule C in your personal 1040 return for self employment business income. You may get a 1099-Misc for some of your income but you need to report all your income. So you need to keep your own good records. Here is some reading material……
IRS information on Self Employment….
Publication 334, Tax Guide for Small Business
Publication 535 Business Expenses
Home Office Expenses … Business Use of the Home
There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Home & Business return and will help you keep up in your bookkeeping all year along with calculating the estimated payments needed ....
Self Employment tax (Scheduled SE) is generated if a person has $400 or more of net profit from self-employment on Schedule C. You pay 15.3% for 2017 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. You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040. The SE tax is already included in your tax due or reduced your refund. It is on the 1040 line 57. The SE tax is in addition to your regular income tax on the net profit.
For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% for 2017 SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.
You must make quarterly estimated tax payments for the current tax year (or next 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.)
To prepare estimates for next year, You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.
OR Go to….
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button
How to report Lyft and Uber income
Tax Tips for Uber, Lyft, Sidecar and other Car Sharing Drivers FAQ
How to import from Lyft
How to enter Lyft tax info
How to get the Lyft discount
What do I need from Uber
How to get the Uber Discount
How to import from Uber
How to enter expenses from the Uber Summary
Yes, tracking mileage is required.
Q. Is tracking it required on the 1099-K?
A. No. That is, there's no line on form 1099-K for mileage. Whether Doordash requires you to report your mileage to them is between you and DoorDash and not a tax question. Even if you do, Doordash is not going to report it on form 1099-k.
The IRS requires two things:
1. It requires you to report all your expenses. It is not optional that you can omit expenses so that your income will be bigger so you can get more Earned Income Credit.
2. You must keep a contemporaneous mileage log to track and document your mileage.
So, yes, tracking it required.