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Today, there are a lot of side hustle ideas that have potential to make you earn endless income—something beyond just $1,000 a week.Uber Eats is one of those opportunities, and the good news is that they are looking for delivery drivers.
But, is Uber Eats 1099 or W2?
When you start a new job, it is really important to understand whether you are employed or an independent contractor. The first important reason why you need to know which of these options apply to you is because if you start a 1099 job, the taxes you owe will not be deducted from your paycheck.
Once you know your status, you can comply with your tax obligations and claim tax write-offs available to you.
Another important point to keep in consideration is that when you work as a self-employed you need to set money aside to pay taxes.
In this guide we will answer your question: is Uber Eats a 1099 job?
Whether you are employed or self-employed, it is not a matter of choice; it depends on the kind of activity you will perform and the way the activity will be provided.
To help you understand what an independent contractor is, we want to start by defining it.
The IRS gives a clear definition of independent contractor. These guidelines enforce what qualifies as a 1099 or self-employed worker.
Basically, you are an independent contractor if you perform services that cannot be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.
Yes, in most states, Uber Eats drivers are classified as independent contractors and receive a 1099 tax form. Uber Eats is a 1099 job because Uber doesn't have any way to control how you perform the deliveries.
However, in California, the passage of Proposition 22 means that Uber Eats drivers are now considered "gig workers" and are entitled to certain benefits such as health care and compensation for expenses. Being an Uber Eats driver in California may offer more stability and security than in other states.
You will get a 1099 from Uber Eats if you earn $600 or more from working as a delivery driver throughout the year.
When you deliver with Uber, you can also review your earnings (base pay, tips, and other Uber Eats rewards) on the Uber Eats drivers app.
As a small business owner, you have to keep up with a lot of different costs. One set of taxes that you will be responsible for are security and medicare taxes, which also fall under the umbrella of social security and medicare. You may need to consult a tax professional or lawyer to make sure you're properly preparing these taxes in order to stay compliant with the regulations.
It's important that you understand the security and medicare tax code, so you can claim all the deductions and credits available to your business. All businesses, big or small, need to pay security and medicare taxes in order to remain compliant with government regulations and keep their businesses running smoothly.
👀 Related Article: Is Uber Eats Worth it
At BestReferralDriver we are a team of independent contractors.
This year we celebrate a very special milestone: we’ve been self-employed for seven years.
Working as an independent contractor is so liberating. You work on your own schedule and do it the way you want to.
Below, you can find some advantages associated with working as an independent contractor with Uber Eats:
There are so many delivery jobs out there, which can sometimes be confusing. However, when it comes to flexibility, Uber Eats is one of the most flexible side gigs.
Uber Eats will never require you to schedule yourself in shifts. When you deliver with Uber East you are your own boss.
You can decide if you want to work more hours or less hours depending on your availability. When you need more money, and are available, you can go out on the road and earn more money by delivering food.
Uber Eats is one of the companies that lets you get paid daily.
Indeed, you can cash out your earnings daily.
The COVID-19 pandemic has transformed the delivery market. With the change of customers' behaviors, restaurants and retailers had to listen to what customers expected and adapt their services based on those requests. Providing delivery and pickup options to their customers is now a priority for many businesses.
When delivering with Uber Eats you will always be busy due to the high request of orders. Uber Eats facilitates any kind of deliveries including groceries delivery , alcohol delivery, food delivery, cigarette delivery and even flower delivery.
👀 Related Article: How to Make 1000 a week with Uber Eats
Uber Eats delivery is a self-employed gig. Starting your own business might have some disadvantages.
For many delivery drivers, the pluses outweigh the drawbacks, but it’s still important to know the potential negatives of working as a 1099 contractor.
When you work as an independent contractor, you are generally not eligible for benefits such as health insurance, sick pay or holiday pay.
We said it. Uber Eats is one of the most flexible side gigs. You can choose to deliver with your bike, which is what some of our team members do. However, if you choose to use your car, you are responsible for your car expenses, including car maintenance and gas expenses.
Since you do not get paid for gas, whether or not that’s acceptable to you depends on different factors including how much gas your car needs and, of course, the current gas prices.
Fortunately, you don’t have to upgrade to a more fuel-efficient vehicle to reduce your gas costs.
Take a look at our guides to Safeway gas rewards, Gasbuddy gas card and learn how to find cheap gas.
Sometimes, the easiest way to save gas money is just by filling your tank at Costco.
Unfortunately, 1099 workers don’t have the same access to employer-based plans or the same incentives as traditional employees do when it comes to saving for retirement. Luckily, 1099 workers can still set aside funds for their golden years by taking advantage of an Individual Retirement Account (IRA) or Self Employed 401(k).
Additionally, setting up automatic payments into a separate savings account can help 1099 workers build their savings to use for retirement at their own discretion. With some careful planning and dedication 1099 workers can create a retirement plan that works best for them and helps ensure they have adequate funds when it's time to retire.
Fortunately, you can lower your tax bill with tax deductions.
You're only taxed on your net profit. When you file your tax return, you have to subtract everything you spent while doing your contract gig.
When you're an 1099 employee, you may be able to deduct a wider range of expenses on your taxes. Many of the costs associated with earning income may be considered business expenses, which can be written off. Such expenses can include business insurance, a portion of the cost of a new car or even equipment. Keep in mind that you need to actually include the expenses in order to claim the deduction.
You also need to keep a record of them in order to deduct expenses.
For example, as a delivery driver you should always keep track of your mileage.
The following are also the most common 1099 deductions for independent drivers:
If you haven’t done it yet, we suggest you add this page to your “favorite” on your web browser. I’m sure that this article will be helpful next time you have to file taxes for your Uber Eats side gig.
First of all, every delivery driver will get an Uber tax summary.
The tax summary can make your life easier when it is tax time. Indeed, in this document you will find useful information including:
You can download the document directly from the Uber app on the Tax Information Tab of the Driver Dashboard.
Your Uber Eats 1099 form is available on your driver dashboard by January 31st, 2022.
Depending on the state where you live and your income earned during the tax year, the 1099s vary a lot.
If you want to have a headache you can try to understand the difference between 1099 nec or 1099 k. Keep in mind that the difference does not really matter for a delivery driver, so you can avoid the struggle.
When you deliver with Uber, you can expect to receive one of the following tax forms:
Delivery drivers may receive a form of 1099-NEC if they performed deliveries and got paid at least $600 or more.
The IRS Form of 1099-MISC reports certain types of miscellaneous income. Delivery drivers may receive a form 1099-MISC if they performed deliveries and got paid at least $600 or more.
There is no delivery threshold to receive this document.
You may receive a 1099-K form if you earned more than $20,000 in gross unadjusted earnings, and you provided at least 200 rides/deliveries. If you do not meet both of these thresholds, you may not receive a 1099-K.
Even if you do not get your tax form, you have to pay taxes and report your income on Schedule C of Form 1040. Indeed, Uber reports to the IRS. The IRS has a copy of your form 1099-k issued under your Social Security Number, so you are not required to attach it to your tax return.
If you haven’t received your 1099 in your mail it is because you have misplaced it. You can always get the information you need from your account online and/or download it from the app.
You can also try the following solutions:
Uber is a green company. All 1099 forms are provided to drivers by default electronically and not physically.
However, if you prefer to receive a physical paper copy, you can opt-in for it directly from your driver dashboard. Follow our step by step tutorial:
Keep in mind that if you opt for a paper copy, it will be mailed on or before January 31st to the business address on the file with your Uber account.
It usually takes around two to three weeks for your tax documents to arrive by mail.
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When delivering with Uber Eats, you will work as an contract worker and you will provide services as a self-employed. This means that you must withhold your own federal, state, and local taxes. Additionally, you may also have to pay quarterly estimated taxes to the IRS.
You can take a look at our complete guide to rideshare taxes.
Disclaimer: BestReferralDriver does not provide tax advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax advice. You should consult your own tax professional advisor before engaging in any transactions.