Gig Economy TAXES, Deductions & More (CFP Explains)

As a gig economy worker it is crucial that you understand your tax responsibilities as an independent contractor. In this video I interview Stephanie McElheny (CFP, EA, ChSNC), President of Financial Planning at Aspen Wealth Strategies.
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🖥Video Timecodes🖥
0:00 - Intro
0:43 - Stephanie McElheny, CFP, EA, ChSNC
1:18 - Your Worker Classification As An Independent Contractor
1:47 - What’s The Difference Between A CFP, EA and CPA?
3:10 - Should You File Your Taxes With A CFP or A CPA?
5:51 - What Is A 1099-MISC? What Should Drivers Know?
8:46 - How Much Should You Set Aside For Taxes?
9:59 - Federal Income Tax Brackets And Rates (2021) - taxfoundation.org/2021-tax-br...
11:53 - Self-Employment Tax Briefing
13:11 - Self-Employment Tax And Deduction Worksheet (2020) - www.irs.gov/pub/irs-pdf/f1040...
13:37 - State Taxes Briefing
15:55 - When Are My Taxes Due?
17:32 - How Can I Pay My Quarterly Taxes? - www.irs.gov/payments
19:07 - What Is A Tax Deduction? How Does It Work?
21:40 - Can You Deduct Commuting Miles?
24:29 - Standard Mileage Deduction vs Itemized Deduction?
27:30 - Documentation Required (Actual Expense Method)
28:37 - How Should I Record My Business Miles?
32:10 - What If I Did Not Record My Business Miles?
34:56 - What Tax Deadlines Do I Need To Know?
37:26 - Contact Stephanie/Aspen Wealth Strategies
37:50 - Your Next Steps
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QUESTION - What other tax or finance questions would you like answered? Let us know in the comments section of this video!
Email for business: [e-mail]
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#yourdrivermike #taxes #gigeconomy
Disclaimer: This video does not purport to be investment advice nor meant to be taken as such. Prior to investing, you should consult with a Certified Financial Planner to ensure that you are making the best decisions for your personal situation after a complete review of your entire financial picture. Any opinions are those of Stephanie McElheny and not necessarily those of Aspen Wealth Strategies. Expressions of opinion are as of this date and are subject to change without notice. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to herein. We do not guarantee that the foregoing material is accurate or complete. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including through diversification and asset allocation.
Affiliate Disclaimer: This video and/or description contains affiliate links, when shopping or signing up for apps using these links I’ll receive a small commission.

[@YourDriverMike]

⚡️Just starting your hustle? Watch this video next: kzbin.info/www/bejne/Z4S9qXiVh8l9oKc

[@samuelosagie-aruya923]

Your video inspires me and helps me a lot on how to be self employed. If not for you in would not have gone to Uber. Uber is the best.

[@whyworkwhenicanrap6830]

Y’all have to shorten this to like 15,16 min to much over talking

[@robmen1402]

Guys, it doesn't seem like gig work is worth it. Scenario, you as a gig worker aka delivery driver make $1k gross per week, that's $48k per year. As a single filer, you are already in the 22% tax bracket which to me is absolutely insane, then on top of that you have to pay the 15.3 for SS and Medicare, then on top of that you have to pay your state tax which at that bracket can be anywhere from 5 to 8%. in NJ you would fall under 5.5% at that bracket. So, that means that once you make your deductions, and you pay taxes on the remainder, you're going to be paying 42.8%. That is basically half of your money, that uncle sam is taking from you. That is insane. When you factor in the holy grail that everyone in youtube keeps pushing about you should have a goal of $25 per hour, once everything is said and done in reality your take home net profits comes out to be you making $14 an hour. That, kinda sucks, it big sucks actually. Because you find a driving job for a company and you can get that amount per hour or more WITH benefits like good health insurance, matching 401k, college tuition reimbursement, etc... So, either I'm completely wrong with here, or gig/deliver app work money sucks. It's shocking for anyone to be told hey make $25 an hour but you're really only making $14 an hour after you pay for gas, car maintenance and uncle sam.

[@krystalgoin]

The CPA I talked to on turbo tax told me specifically any miles for your business are tax deductible. I asked if that includes driving to the area Im driving in and he told me yes, they are tax deductible because its FOR your business, same as driving to hotspots. I write my ODO when I leave the house starting out and my ending ODO when I get home. Then total it up for miles driven during my work day. I average anywhere between 100-150 a day depending on how far out of town I deliver to. He also told me ANYTHING I purchase for my business specifically such as a cell phone, accessories for it, and cell phone plan are 100% tax deductible. Only if you use a personal phone is it not 100% deductible, its more around 25% deductible. So I went ahead and got a phone just for work. I only use it while working. Never at home unless its to go over my work day. Like stops, tips, delivery pay, etc.

[@kevinmilo3464]

Thanks for this info Krystal

[@krystalgoin]

@@kevinmilo3464 also, if you have to go fill your car with gas before driving, those miles are tax deductible as well. 😉 and youre welcome. Hope it helped.

[@HotTakeAndy]

Damn does that work out per month?

[@MrFozzgate]

My EA told me basically the same thing as Krystal. Specifically if I drive out to a delivery that's 18 MI and I'm off the clock but then I have to get back I get to claim those miles driving back. Just as I can claim miles driving to hotspots or back from any other out of the city deliveries.This is what he told me.

[@bartimusmaximus337]

It's literally in the irs website. Start stop rule. Miles from your home to the first pickup sre not deductible. Miles from last drop to home are not deductible. The only exception is if you claim a home office. Good luck with that lol I've found some of the h&r and TurboTax people do give bad information just my experience. The crazier part is one CPA will tell you one thing, another will tell you something in direct conflict with what you were previously told. The only fail safe I think you have is if pay extra to get the audit protection.

[@mohammedmassoud1753]

Very valuable info , and I believe that if you make a video on your own showing how you to do self taxes using turbotax would also be very helpful to us

[@LomaRisper]

Learning how to do your own taxes is extremely valuable. I'm a business coach who teaches gig workers how to save money and file their own IRS tax return in 30 days or less.

[@TellYourStory]

There is a gray area in commuting miles. If you are using an app that you can turn on from home, to where you want to go, then deduct those miles.

[@chuckvalvo4008]

Thank you for recording this video!!!!

[@crispyrobot77]

Great video Mike. TONS of value for sure. Must-have info for anyone in the Gig Economy.

[@TheDarcieProject]

Thanks for doing this Mike! I’ve got lots of questions and I’m excited to know the answers.

[@yourdriverteam-matt1001]

Thanks for watching Stephanie!

[@kcstarkey9140]

Very informative and great guest. Thank you.

[@rodfarley5802]

New to this Gig economy! Looking forward to seeing what you have to say!

[@HerenorThere524]

Thank you for everything you do Mike! New driver here and this info has helped a lot

[@StarsStars714]

Very informative, Thank you both.

[@laurenbridgeman3810]

Mike!!! THANK YOU so much for this video!!!!!

[@YourDriverMike]

Glad to help Lauren

[@joemercaldo2198]

Thanks so much Mike this was very informative

[@bt60613]

Very helpful. Thank you

[@HotTakeAndy]

Thanks so much Mike! Didn’t even know I needed this info! On day three of DoorDash.

[@michaelfish09]

Very cool sharing this knowledge. Thank you all! P.S. Mixed use here.

[@futurelegs6996]

Thank you very helpful

[@mrmusclecarsuspect5362]

It’s gonna be my first time with a 1099 form but this video is very informative and I’m going to be ready! Thanks

[@maxpainmedia]

How did it turn out? Im nervous lol

[@mrmusclecarsuspect5362]

@@maxpainmedia not bad just save all your receipts for what you spent to dash. Gloves,mask sanitizers, etc... gas receipts. And track your miles. I use stride and at the end of the year ut allowes you to print out your miles recorded. Easy app to use.

[@maxpainmedia]

@@mrmusclecarsuspect5362 thx for replying

[@LomaRisper]

If you want to get in-depth coaching through the tax filing process, I'm a business coach who teaches gig workers how to save money and file their own IRS tax returns in 30 days or less.

[@TheTalkingTreeEmporium]

@@LomaRisper Interested

[@TheHALOREACH55]

So I love the video I share it already. However I'm a little confused. I started UE March 15 of this year. My question is do I have to pay the quarterly taxes on April 15 of this year. Another question SS and Medicare is that 15.3% for every state. I live in CT and I would like to know how much % should I take out for all 3 fed, state, and ss/med combine if possible thank you great video by the way.

[@jeremiahgrover8169]

I had an older car sitting around that I just now only use for gig business so it’ll be easy just keep receipts on everything

[@glenncrothers6180]

Thanks!

[@YourDriverMike]

Thank you for the Super Thanks Glenn!

[@osiris3988]

Great info!!! I just started in December and need to get all this info !! Lol

[@stephaniemcelheny4766]

Thanks for the feedback! If you have any questions, please let Mike or I know!

[@yourdriverteam-matt1001]

Thank you for watching Joshua!

[@TheFuzzypuddle]

A point of clarification: she said quarterly payments are due in January, April, June, September. I assume she means that if you submit at September 15th you would use the months of June, July, and August as the period covered by the submission. Is this correct?

[@lilbuttblondie3409]

question . so i can either use the mileage of gas used OR i can use things like insurance , car washes , maintenance etc ?

[@marieseymour4520]

Hi mike Question I self filed I used H&R and I filed with my W-2 in hoping the software was correct but now as for my State in Hawaii and it’s asking for my General Excise aTax?

[@bre9536]

I just started doordashing in January 2021. Do I need to pay any quarterly taxes this April?

[@fredhoelscher3230]

My question is I saw another video on this subject and it said u don't pay taxes on your total earnings but only on your Profit after u calculate your deductions. Is this correct?

[@mako0845]

If you are home with the intention of working in a different area. You turn on the application with the hope that you will get a Pickup/delivery to take you to that intended area. Will those miles be deductible, even if you did not get a gig?

[@savvyshopperdelivers]

Mike you can count the miles from the time you leave your house. That's what most CPA's have said, but if it makes u feel better, turn on your app so u can see what orders are coming in for the day! U might just get a great one u can take! I turn my apps on in my driveway but I could get an order right there that I'd take!

[@GigTax]

Bingo!

[@abhilash1237]

Hey Mike, can someone please guide me how to file taxes while delivering in CANADA as well, pleasee

[@mako0845]

Can you rely on the miles the app tracked for you?

[@gustavohernandez3317]

So if I started in February 2021 what are my key dates?

[@jamesweatherman5896]

Was there a percentage for the state tax? I missed that part of the video?

[@lorilynnrieseberg7316]

I’m getting value from your content. Eventually might have own channel! Gotta get cameras and learn some mor first. Have not mastered paperwork. Thank you 😃🌺😃💕Lala

[@lorilynnrieseberg7316]

From a small 2 college upstate New York area. Either it’s really good or it can g really bad. Gotta get my confidence to taxi/ rideshare. Only have do 4 rides but 400+ Ubereats/Postmates. My partner/dreamer/son died in July and I’m just working this it slowly. 💕🌺Lala

[@yesic2288]

Do you know of any tax preparers in the San Diego that area you recommend?

[@anissiabalistreri9612]

Is there a leasing vs. Purchasing a car? Are there different deductions.

[@venetiakelley]

What if you use one of those apps that track your business mileage and business expenses, and is IRS compliant?

[@BrianBloop]

I just started with uber eats..I know today is the 1st quarter payment but idk if I have to pay something now or if I have to w8 till next yr

[@elizadeniseroyal2099]

I go to HR block annually. The quarterly taxes was alittle scary. Documentation is a challenge. The H and R block agent gave me the max standard miles. The app for miles was a good suggestion. I'm thinking a cpa is more detailed than Tax company like h and r block. I learned some Tax pros specialize in business taxes, which is what gig work qualifies under.

[@emojidinosaur7300]

HR is a rip off.

[@thedanholler]

Well I just started on uber eats Jan 2021 and haven't recorded ANYTHING. I didn't know I had to, because it's all in the app. What do I need to gather from the records in my driver app? Also, since I just started a month ago, am I responsible for payments this year, or not until next year? And how do I know if I'm required to pay quarterly or just yearly? Please help...

[@ultralightcam6963]

I have the same questions

[@richeyrich2203]

It’s pretty easy to go back and take an average. Record the rest of what you have for the rest of the year and use that ratio based on the number of hours you know you worked previous to you starting recordkeeping. The company keeps track of all your earnings and when you had payouts and they may even track how many hours you were on shift. That will help you figure out what you need to for the first half of the year

[@pacersconnor]

So you HAVE to pay quarterly? Or can you just once a year

[@michaelwilliams2123]

In Pennsylvania we also have Local Income Tax, due quarterly.

[@stephaniemcelheny4766]

Great point, Michael. That was bit beyond the scope of this KZbin video but a very valuable point to make! Taxes get extra tricky on a state by state and locality by locality basis, so always good to double check your personal situation. Thanks for bringing up!

[@jenniferfrongia9838]

When it comes to local ‘city’ taxes, how does that work when it comes to deductions? (Whether is be miles or expenses) Do we get taxed on 100% of our income? Or do they also take into account our deductions?

[@JTStonne]

What if I created an LLC to drive? How does that change things?

[@scotthodgin7494]

Regarding mileage deductions for food delivery, etc., it is my understanding that miles driven to the 'first' restaurant for the day are considered 'commuting' and are not deductible as well as miles driven from your last food drop-off to your home. I cannot find concrete documentation on this though. So, my question is, at what point in your day can you starting tracking mileage and at what point must you stop tracking mileage?

[@krystalgoin]

The CPA I talked to told me any miles driven FOR your business are tex deductible. He said this includes driving to a place to drive in because those miles are for your business to thrive. This also includes driving to hotspots and to a gas station before work so you have gas to drive during work. I specifically asked him about hotspots and driving to the town over to drive deliveries. Now this is in Oregon and maybe it varies by state...but according to the CPA through turbo tax ALL miles for your business are tax deductible.

[@robbielynmccrary872]

scott u r correct

[@richeyrich2203]

No, if you’re on an order and driving to that business, the drive to the business is deductible. If you have accepted a ride or delivery, the miles t get to the location of pickup are ilea driven directly for the purpose of the business/work. This is important to know because Uber and lift do not track the miles from the location you accept the order to the location of the pick up. They only track the miles from the pick up location to the drop off location. But the miles driven from when you accept the order to the location of pick up are part of direct business expense/use and are therefore deductible.

[@dianaseverns7228]

Listen there is NowAy the government is going to check to see the mileage u drove to a store and home. What about when u drive n it says it will take a Mile n u get lost , so u can’t deduct your miles when u get lost? The government looks at concrete income. If you lie about any money you made that is under yourrrrr social security number. Interest, work income, lottery over a certain amount things like that. I’ve been doing taxes for 25 years. I did mileage for my husband for the union he was pioefitter. As long as I put down every dollar we made ….. our deductions were never audited. U just have to disclose all income except child support

[@logi_bear3421]

Unless your house has an office

[@angelaengle12]

Would car repair/maintenance, and gas count as itemized deductions? What about supplies for the business like hot bags and cellphone repairs? Are those also itemized deductions?

[@GigTax]

repair, maintenance and gas are deductions you'd take if you were deducting your vehicle expenses through the actual method. Supplies and cellphone related expenses can be written off whether you take the actual or standard mileage deduction.

[@gregmadison556]

You have to file quarterly if you're tax is over $1000. But does that include Self employment tax and federal tax or just federal tax. The estimated tax form includes SE tax and Federal tax. I Googled it. Some say federal some say total tax.

[@kevinfaigle6453]

What happens when you drive in 2 states? What if you pick up an order in one stste, yet deliver in the next state over?

[@stephaniemcelheny4766]

This is a super interesting question and one I haven't encountered before. But based on my understanding of tax law, you wouldn't have to worry about taxes in that state since you're based out of your home state. Please don't take this as gospel - definitely consult a tax professional or your tax software - but again, I'm fairly certain you just need to worry about your own state's taxes.

[@creekboie3277]

H and r block charges me around 350 to do my taxes so I thinking of doing it myself don’t know if it’s cheaper.

[@Cyriacus58]

What about a retired person and also doing side gig.

[@AwilsonBLOGME]

I just started working in 2022 do i file taxs on 4 15 22 or i wait till next year 2023

[@samathim6106]

Hello, I’ve been wondering about what is the tax classification for the delivery driver? I would to thank if I get the answer.

[@richeyrich2203]

When talking about these gig apps you are a self-employed/sole proprietor. If you are a delivery driver working for a place like Papa John’s, you are a W-2 employee and fall under a different tech schedule

[@snowwolvesproductions]

How detailed MUST your mileage be... I tried to track each one on paper but it gets busy and I can't keep up. Is it ok to just record your start mileage at the first gig and then (with no non-business stops in between) your mileage at your last stop and record your mileage for the work day, or do you have to have exact records of each delivery mileage, mileage to your hotspot to pick up new jobs, and then end with your last stop? What if your deductions from your gig exceed your income from the gigs, will it roll over into your regular W2 job (in theory). Thanks!!!

[@bartimusmaximus337]

If your miles are that high, you are wasting your time. You are basically driving away whatever life/ value your car has left for free.

[@rodhoutx]

I'm still not totally clear on commuting miles. There are two scenarios. 1. I'm in my house and am ready to work. I turn on the app and I accept an order while still at my house. Is mileage to that first restaurant considered business or commuting miles? Scenario 2 - I turn on the app and leave my house and drive around for a mile waiting for an order. When an order comes in I accept it and drive another mile to the restaurant. Are both of those miles commuting miles? Or are they both business miles? Or do business miles not start until I am at the first restaurant? Also, I always log miles back home as commuting miles whether I have the app on or not.

[@crazyfool9687]

I have the same question 😭

[@andrewshore3313]

to clear this all up, no matter what the situation, anytime you are driving for work the miles can be written off, if you go and drive around all night and only get 1 order it still can all be written off because it’s necessary for you to make money. personally i start the app when i leave my house and turn it off when i’m back home for the night, no matter what happens in between, unless i stop working of course

[@MrLgarcia97]

thats what i do as well got kinda confused about it when she said that it has to be in the act of doing business.. essentially your driving to that place with the intent of doing business so why wouldnt we be able to write it off

[@MrLgarcia97]

@@andrewshore3313 .

[@rodhoutx]

@@MrLgarcia97 The IRS rules explain commuting miles. If you had a more traditional self-employed/1099 job, your miles to the first customer of the day are not deductible, nor the miles after the last customer to get back home. Some say it's not until you accept the first order (before that is commuting miles). The more obvious distinction is if you have to drive to an area (because you don't live in a Door Dash area), that is commuting for sure. I see some also mention intent and being available on the app. Have more often seen it in terms of Uber Drivers.. the drive to pick up the first customer is not deductible (commuting), even though just like us they accepted an "order". What many of the mileage tracking apps say (everything is deductible) directly contradicts the advice of tax preparation/tax pros (cannot deduct first trip). EDIT: I know the Home Office deduction changes this where there isn't commuting. There are very specific requirements around that though. Burden of proof is always on you not the IRS.

[@KingKurogiii]

so if i continue to do this full time i'll have to pay probably around 12%-22% of my gross throughout the year for federal taxes along with another 15 some odd percent annually for self employment taxes for a total of 27%-37% of my income needing to be set aside for taxes? i was kind of hoping to see more of what to do down to a level of what to do when you get your direct deposit each week. do you just set aside 27%-37% of it? do you figure in tax deductions and put whatever is left aside? do i take out business expenses like gas and so on and then tax whatever i net after? i'm getting my first checks for doing this tomorrow and i'd like to know how much to be able to actually pay myself for personal use. 🤷🏻‍♂️

[@stephaniemcelheny4766]

So I can't say exactly that your federal taxes would be without knowing your specific situation, but that range could very well be on the money. That's where I would use the 2021 federal tax tables (and use the single, married, etc. depending on your status). Also, with the 15.3% self-employment tax - that seems like a lot on top of federal and state, but keep in mind that you get to deduct half of that when computing your taxes on your 1040. So think of it as closer to 7.65% when all is said and done. But, in terms of "what to do when you get your direct deposit" - yes, I would probably keep a good chunk of it "back" in a separate account for taxes. Then, you can not only use that account for your federal quarterly payments (and whenever you make state payments), but you'll also have it ready for when self-employment tax is due on April 15. You shouldn't deduct gas or anything else out unless you're doing the actual expense method. If you're using the standard mileage deduction, then you wouldn't deduct gas. Hopefully that helps but if you have any other questions, please ask. I can't get super specific with everyone, but I'll do my best to clarify anything you need help with. And, I know I sound like a broken record, but I would recommend hiring a tax professional or, at the very least, using tax software.

[@robmen1402]

You also have to pay state tax, my boy. If you're making over $40k per year gross, than you're goin to be paying 22% federal as a single filer.

[@chrisortega0899]

Hello, Mike, I recently started driving for Door Dash and I have a question I hope you can answer: I have a spreadsheet to record my Door Dash mileage; However, say I was running two apps (i.e., Door Dash and UberEats) and I drove 50 miles while both apps were on, would I be able to deduct the 50 miles for my Door Dash 1099 and 50 miles for my UberEats 1099? Or would I only be able to deduct 50 miles total for both since I was only driving one car? Thank you.

[@drrnmrzn]

Only 50 miles total. There is no double dipping business miles. You can divide those miles based on which you drove uber eats/doordash

[@emojidinosaur7300]

Do you have documention for those miles?

[@TomTom-gn9mp]

Why don't they just call it a 1099-IC for Independent Contractor?

[@TomTom-gn9mp]

I think it's easiest to just take a picture of your odometer on Jan 1st and Dec 31st. Then just deduct a percentage from that mileage for mixed personal use.

[@justafryguy]

You cannot use this method is it’s your personal car.

[@TomTom-gn9mp]

@@justafryguy Most people work part time delivering food and you can write off any mileage used for that purpose. If a person uses the car lets say 10% of the time for personal use then that has to be deducted from the total.

[@waynesmith6393]

@@TomTom-gn9mp this is 100 percent not how you should do this 😂😂😂😂 good lord I hope you're not serious haha

[@TomTom-gn9mp]

@@waynesmith6393 It makes sense to me.

[@bonnietcreations]

You will get audited for stupid stuff like this

[@braveheart6207]

Great Info Mike, and thank you so much! I have 2 concerns regarding the deductions, are the gas and car maintenance expenses within the Mileage write off ?? so we can't write off the gas expense and the car maintenance if we are writing off the Mileage! as an uber eats driver can I still write off other expenses like food delivery expenses heat bags, masks ,hand sanitizers dash cam and some car accessories that for the use of the delivery ?

[@stephaniemcelheny4766]

Hi! Gas and car maintenance are separate from the mileage write-off. So if you're going by mileage, you can't also deduct gas and car maintenance. The IRS kind of "bakes" those into the standard mileage deduction. The other things that you use in your business (i.e. hand sanitizer) can be written off separately regardless of which method you use.

[@braveheart6207]

@@stephaniemcelheny4766 Thank you so much!

[@marieseymour4520]

I have a question Do I need a GET license?

[@dianaseverns7228]

It’s not hard after doing this for awhile other than mikes which I have an app for that but u can pretty much know how many times u filled your tank n what it cost, your car insurance your phone your oil changes I got two in five months, I put about 40 a week for dashing my mikes are about 4000 from last year n started end of October. I can roundabout figure it out. Just like my medical bills I round it . I don’t know exactly because they say what you paid in cash, credit so I’ve saved every receipt but I’m just gonna round it n see what happens but I thought you had to have alot of deductions to surpass the standard deduction.

[@robmen1402]

A lot of people say that they do the standard because you don't have as many itemized expenses as a delivery driver to make that much more of an impact on your deductions, so I don't know. That is what I have heard.

[@MELISSA-rp1wy]

So I just started doordash 2weeks ago my first quarterly payment should be April 15th right?

[@yesic2288]

You should ask your tax preparer for more info but some states only require you to pay quarterly until your second year

[@Joemikolai]

Question: I live in Colorado Springs and commute up to Denver for deliveries. When I finish in the evening I need to fuel up. There's a gas station not too far from my home (comparatively). Can I record the miles driven from Denver to monument where I fuel up?

[@stephaniemcelheny4766]

My professional recommendation would be no, BUT I would recommend consulting with your tax professional (or tax software provider) to get their thoughts as well.

[@Joemikolai]

@@stephaniemcelheny4766 I'm preparing to use someone else's expertise, but is it a bad idea to get another persons input?

[@stephaniemcelheny4766]

@@Joemikolai Nope! I always recommend getting a second opinion on trickier matters like these.

[@Joemikolai]

@@stephaniemcelheny4766 I reread my comment and realized I lacked some specifics. I'm planing on using a accountant to file my 2020 taxes but would appreciate additional insight. Preferably yours. I saw I could reach out to you on your company website but since we've begun a conversation here I would hope I wouldn't have to start over filling my information out there. Assuming this, how do you recommend I move forward in setting something up?

[@johndixon7710]

If you have to pay 30% in taxes on top of expenses then you’re going to make only about 20% of your total. What’s the point in doing it at all?

[@phuckhugh2698]

Does the app record how many miles you drive for them? And put it on a tax document so you can claim it as a business expense?

[@jgerrard565671]

Don't rely on the apps to give you the right mileage! Generally how I've seen them track mileage is it's just the mileage from pickup to drop off. They end up really low-balling you on mileage since it's not counting miles driven to get to the pickup or miles driven to a hotspot while online with the intention to accept orders. I personally use the Stride app to track my drives and any delivery accessories I might purchase, and Stride is completely free no need to pay for a tracker app. I use TurboTax free file to file my taxes and it was just as easy as filing my W2 taxes. Just put all your earnings in from each app and they will allow you to do either standard mileage or itemized deductions. I do the standard deduction since my car gets 27+mpg and is pretty reliable, and Stride will have that standard deduction calculated from tracked drives at the year's rate plus any hot bags, phone chargers, % of cell plan used for work, etc I may have bought and then entered in to Stride. Then it's just gross earnings minus deductions to get your net profit. This is the amount you will actually owe taxes on. Whatever tax prep software you use or your tax consultant will be able to fill out the necessary forms with your earnings, work mileage, total mileage (write down your odometer reading from the beginning and the end of the year, really only necessary if you're itemizing to get your proportion of work to personal mileage), and any other deductions for non vehicle business expenses. I will say though I am not a tax professional, so take everything I wrote with a grain of salt and do your own research as well. I hope this helps someone who needs it!

[@robmen1402]

@@jgerrard565671 Curious what is the total percentage you pay in taxes??

[@incogneter]

This is very helpful but I'm also very stressed out now

[@stephaniemcelheny4766]

Anything specific I can help with?

[@FleurdeAli]

I'm feeling similar

[@stephaniemcelheny4766]

@@FleurdeAli anything specific questions you have? Or anything I can help clear up?

[@heymanders2356]

What can be a deductible?

[@FleurdeAli]

@@stephaniemcelheny4766 many

[@anthonyspedalieri4303]

If we are only using our vehicle for deliveries do we still need to track mileage separately than the odometer?

[@stephaniemcelheny4766]

Theoretically, if you're only using your vehicle for business and nothing else, you may be fine. That being said, if you go out of your way for anything personal (i.e. lunch, cheaper gas prices, etc.) then you should deduct those "additional" miles. As I mentioned, though, always best to check with your tax professional (or tax software provider)!

[@anthonyspedalieri4303]

@@stephaniemcelheny4766 Thank you!!!

[@jaycrew101]

Hey Mike how you doing I got a question about deductions they say either gas or mileage.. well I drive a car averages 17 miles per gallon and only uses premium gas do you think gas would be better to use as deductions than mileage please let me know

[@robmen1402]

Wow, that is not worth it, my boy. 17 miles per gallon, you're going to be spending A LOT of money on gas. If that is the case then you should do the itemized tax dedution and not the standard per miles deduction. So that means that you would have to save receipts for everything all your gas, miles, oil changes, everything. But, I still wouldn't recommend doing this type of work with a car that will only give you 17 mpg. You need a car that gives you at least 30mpg or more. You could always buy a hooptie. Like a good used car for cheap like $3k. A honda civic or accord 4 cyl. The engines never die and can run up to well past 300k miles

[@jaycrew101]

@@robmen1402 well 17 in city

[@MI325A]

How do I find the amount of miles tracked in the DoorDash? I've searched and not seen anything as of yet. I also checked my Google Maps and there is no history either.

[@endofquoterepeattheline7516]

Lol you need to either keep track yourself or get an app (basic or $$$$)

[@kristinkudron6694]

I was curious if this happened to anyone else on my boyfriends Uber eats account he cashed out twice and said he reached the maximum limit of cash outs and we usually only do it in the morning/afternoon take a break then go back and do Uber eats from 5-10/10:30 also why does it always say -50 after cashing out? It doesn’t seem to take the .50 when I do instant pay I just need some answers lol

[@robmen1402]

Why are you cashing out so fast? lol. Did he cash out twice in the same week??

[@josecolon2818]

Hello , Mike I enjoy your videos more than others …. Can you do a short video like 2-5 min in plain English of what’s the easiest way to do your taxes , I just hate long confusing videos. I’m doing Uber eats for the first time . Thx

[@ModelcarNick]

Can you file you door dash and uber eats together?

[@stephaniemcelheny4766]

Hi Nicholas, you would file everything under your Form 1040 that is due in April each year. For quarterly payments, the IRS doesn't care what liability it's for, they just want to make sure that by tax filing time, you've paid in enough to avoid an underpayment penalty. Self-employment tax is also calculated on all self-employment income, so again, it doesn't matter which source or how many you have. Hopefully that helps!

[@FrugalGamerFlashback]

What’s going to happen when fuel goes back up to $7+ a gallon?

[@stephaniemcelheny4766]

That's a good question - the IRS would very likely adjust the mileage deduction upward.

[@FrugalGamerFlashback]

@@stephaniemcelheny4766 I’m doubting that. The current regime seems determined to kill the gig economy because it’s not good for “climate change”.

[@dennismadigan2023]

I'm being told that if I am doing the standard deduction, claiming mileage, that I can not claim anything for the vehicle like winter rims and tires, car washes or anything pertaining to maintenance and up keep for my vehicle. Is this true?

[@swoods291]

Yes that is true. You can only do one of the methods. You either claim the standard mileage deduction or you do the individual itemized expenses for your car.

[@dennismadigan2023]

@@swoods291 forever? Can I change from year to year if things change?

[@swoods291]

@@dennismadigan2023 Yes you can change from year to year.

[@venetiakelley]

Can you claim mileage and business expenses and pick the one that pays more, when it’s time??

[@dennismadigan2023]

@@venetiakelley sure

[@wuestion9473]

Hello, neighbors. It’s a beautiful day in the neighborhood.

[@YourDriverMike]

🌉🏘

[@Robert-fq3gs]

Can I adjust my withholding at my main W2 job to take out more tax, would it count towards my side gig tax?

[@stephaniemcelheny4766]

Hi Robert, great question. Withholding more for your W2 job would certainly help offset your federal tax liability - so yes, it would count towards your side gig FEDERAL tax bill. Important to note, though, that you'll still owe the full 15.3% self-employment tax on your side gig income and there's not a workaround for that on the W2 side. So keep that in mind when planning to pay your self-employment tax bill due on April 15 each year.

[@Robert-fq3gs]

@@stephaniemcelheny4766 would I have to still pay that portion quarterly? Thank you so much for replying!!

[@stephaniemcelheny4766]

@@Robert-fq3gs a famous financial planner response - "it depends." If you're withholding enough to fully cover the tax liability of both jobs, no, you shouldn't need to. But if you think you might be coming up short and the withholding may not be enough, then you'd just have to make smaller quarterly payments. Hopefully that clears things up but if it doesn't, let me know!

[@Robert-fq3gs]

@@stephaniemcelheny4766 Thank you so much for the information, Mike's channel has been a huge help. Thank you for taking the time to come on and help us all!!

[@yourdriverteam-matt1001]

@@Robert-fq3gs Thank you for watching Robert!

[@johntofany3868]

Uber tracks your mileage, not sure if the others do. Let me know

[@thoughtsfromyour30s97]

Not really clear. How much should i be saving? ie. I make $75k. I live in a state with 9% state tax. What % of my income should i be saving for taxes?

[@Soaring_Seajay]

Great question. Did you ever find out?

[@zeethree]

Uber Eats doesn't provide a 1099-NEC with your earnings on it, only bonuses on the 1099. What should you do when the company doesn't even present it's drivers with a tax document? I have no idea how you are supposed to file Uber Eats on anything other than TurboTax (which is broken). Also I don't know how the heck anyone could prove their mileage or cell phone for mixed use. It's impossible. So much nonsense and every professional just giving CYA responses to questions. I have no idea how they expect you to pay quarterly, doing this even once a year is too much of a PITA. What is the penalty cause I'm thinking if it's not major it makes more sense to just take the penalty than deal with this BS 4-5 times a year.

[@richeyrich2203]

Do it yourself. You know how much you got. It used to be that an individual was responsible for keeping track of how much they made and reporting it. Only recently has faith in humanity been lost and everything have to be tracked and recorded for you. Just keep track of your income and report it. That’s all it is. Do your tax return by hand and you’ll learn what it’s all about

[@LomaRisper]

If you really want to learn how to file your taxes, I coach gig workers on how to do it.

[@JCV628]

To my understanding, the first year we are not required to make quarterly tax payments, as long as we never own anything in the past…

[@robmen1402]

what do you mean by "never own anything in the past" what does that mean?

[@JCV628]

Hello Rob Men, as long as you never owed money to the IRS in previous years, your first year on business you are not required to make quarterly estimated payments. However, I do recommend doing so, in this way it forces you to stay organized through out the year and will make things a lot easier when tax season comes around

[@justmegigi22]

Do I pay taxes for Washington state? Or is that only for states that require you to file a state income tax?

[@stephaniemcelheny4766]

Hi Guenevere, you are not required to file anything for Washington state!

[@justmegigi22]

@@stephaniemcelheny4766 I can not thank you enough for everything you shared on the video! You have helped me immensely! I now know I need to pay federal and self employment tax, how much and when, plus tax saving deductions! You are truly amazing 🤩 Thank you 🙏

[@TomTom-gn9mp]

I have been an I/C for decades and I have never filed anything more than Annually.

[@YourDriverMike]

Was there any every a penalty for doing so? I've always done annually as well through Turbo Tax but have been aware of the quarterly payments

[@TomTom-gn9mp]

@@YourDriverMike I never had a penalty and I use Turbo Tax as well.

[@stefan82010]

What should I do if I didn't pay amy taxes in 2020?

[@stephaniemcelheny4766]

Unfortunately, I can't answer that as I don't know what reason(s) existed for not paying taxes in 2020. I would recommend speaking to your tax professional or someone at the tax software provider.

[@jonhumphrey1768]

If I made 100,000 hiw much will I pay?

[@Joemikolai]

I have two cars, the car I use for my business I use exclusively for deliveries and my other car exclusively for personal use.

[@stephaniemcelheny4766]

That's a great idea - I would think that makes your life a lot easier come tax time!

[@Joemikolai]

@@stephaniemcelheny4766 I sure hope so. 2020 was my first year doing this and feel like I have no idea what I'm doing, especially the tax rules (admittedly, I don't usually give myself enough credit.) By the way, I live in Colorado Springs and deliver in Denver as my job. Could we meet up? I want to educate myself as much as I can and would love to meet up for that.

[@stephaniemcelheny4766]

@@Joemikolai Sure - right now is a bit crazy but once everything settles down with COVID and we open our office back up, more than happy to!

[@Joemikolai]

@@stephaniemcelheny4766 oh! Your office isn't open right now. I'm sorry I assumed it was. Are you doing zoom conferences or the like?

[@yourdriverteam-matt1001]

@@stephaniemcelheny4766 Thank you for the great info Stephanie!

[@sequoiariihiluoma6379]

What if I don't have google maps records? I used the dasher in app navigation and can't check my miles, I just started doing doordash in October but have made it full time and I'm a little stressed about tax time this is also my second time doing taxes. The dasher app doesn't show the house address you dropped off the food only the restaurant where you picked it up. How bad would it be to just guess, I don't think I would get an audit because I've only made about 5.2k on doordash?

[@stephaniemcelheny4766]

Hey, I unfortunately can't answer the specifics of this but maybe Mike can? If you have to guess, I would err on the side of reporting less miles than more. Sorry I couldn't be of more help on this one!

[@sequoiariihiluoma6379]

@@stephaniemcelheny4766ok thank you for the input hopefully I can figure something out

[@wrnowown]

Wow it's really really a bore but I learned a good point it's all there in google

[@MTG-vp2kn]

take pic of your odometer before starting and ending driving

[@waynesmith6393]

It's not as simple as that haha

[@Kostly]

Create a 2nd bank account and stash 30% of your earnings in it as a tax payment account. You certainly won't pay 30% so it doubles as a savings account.

[@robmen1402]

What do you mean you won't pay 30% lol? in the video she says you pay Federal, the 15.3% for SS and medicare AND your states taxes. Just federal taxes alone if you make over $41k per year is 22% of your income, then add the 15.3% and also add your state tax. That's WELL over 30%. Everyone keeps saying different things, about the taxes, lol.

[@fuckthisbs]

So using the actual expenses deductions, can't you just add everything up (gas receipts, insurance, car payment, tires or maintenance) and simply deduct those? If I'm using my personal car for work, how am I supposed to figure out how much to deduct, since some days I do Instacart and some days I don't.😕

[@robbielynmccrary872]

u can do that but doing mileage in a lot of cases works out better itemizing all your deductions it just depends

[@antoniovillanueva1119]

Thank God that Uber gives you a copy of your miles that you were driving online.

[@iGunSlingeRv2]

So basically you wont have to do anything if you made less than $600 on these gig apps? I just started Dec 2023.

[@JTStonne]

The IRS says if your app is on and you're willing to take orders the miles are Tax deductions.

[@HotTakeAndy]

Source?

[@JTStonne]

@@HotTakeAndy IRS.

[@johnjay4015]

I drive Shipt and Uber Eats as a side hustle. I am still confused if I have to pay quarterly taxes. I read somewhere that you only have to pay taxes once a year with Uber. Can you help provide clarity?

[@BurgBoy7]

I have the same question.

[@vincentleung4715]

I have the same question as well

[@endofquoterepeattheline7516]

You don’t have to pay quarterly…that’s just an option so drivers aren’t hit with one huge tax bill when filing taxes

[@tamar7065]

Did she just say that your HEALTH INSURANCE is deductible?? Is that for real? I'm about to start paying health insurance out of pocket and it's so freaking much, that would be amazing for me right now.

[@waynewill801]

So if I’m a driver do I pay quarterly or annually? I still don’t get it

[@MonicaHernandez-yn8ct]

What about gig insurance? We aren't covered.

[@YourDriverMike]

Hi Monica, you can speak with your current carrier and ask about supplemental or hybrid insurance to cover gig app driving. Typically from my experience it isn't much more per month. Hope this helps!

[@snazzyjazzyshar]

😂❤ 19:38

[@spydamark]

Couldnt your mileage deduction alone be enough that you dont owe anything?

[@stephaniemcelheny4766]

Good question - theoretically, I suppose, that could happen. Personally, I haven't seen any cases like that but if you believe you might be in that situation, I'd definitely recommend having your tax pro (or tax software provider) weigh in first.

[@Typing.._]

Just do miles _easier

[@rickdesantis6631]

Hey Mike, if you need tax help or advise message me. Im a CPA from the Philadelphia area.