Tax season is in full swing, and if you're a GrubHub 1099 delivery driver, you need to start thinking about filing your taxes. It's time to put on your accountant hat and prepare for the upcoming tax year. Keep reading to learn more about GrubHub 1099s and what you need to do when they come knocking at your door.
We'll also talk about how you can use a tax app to track receipts and lower how much you need to pay to Uncle Sam at the end of the year. Now, without further ado, let's get into when you will receive a 1099 from GrubHub.
Note: If you want an app to organize your receipts, remind you of filing deadlines, and help you estimate your taxes, try Bonsai Tax. Our software could help make it easier to track your expenses and save you a lot of money from your tax bill. Users save on average of $5,600. Claim your 14 day free trial today.
When You Will Receive A 1099?
The IRS requires businesses to send out 1099s via mail by January 31st to drivers who earned more than $600 through deliveries.
The 1099 form will have all your tax information detailing how much drivers were paid for each delivery they made during the year along with other important tax documents.
Depending on if you meet specific requirements, you'll be sent a different 1099 tax form.
Here are the different forms and qualifications.
IRS Tax Form 1099-NEC
The 1099-NEC is a form where folks use to report their non-employee compensation income.
In previous years, people would report this income on their 1099-MISC. However, in 2020, the IRS reintroduced the 1099-NEC to cover this portion of income. If you made over $600 on the GrubHub app, you should have received this form in the mail after January 31.
1099-K Tax Form
If you made $20,000 and over 200 transactions on the app, you'll receive a 1099-K. Vermont and Massachusetts GrubHub drivers will get a 1099-K regardless on if they made $20,000. If a driver in these States made over $600, they will get a 1099-K instead of a 1099-NEC.
What To Do If You Do Not Get A 1099
If you met any of the requirements listed above and you did not receive the form, check the address on your GrubHub account. See if the information is incorrect because the form could have been sent to the wrong address.
Another reason why you didn't receive form in the mail, is if you earned less than $600. In this case, GrubHub is not required to send you a form, but you'll still need to owe taxes on the money you earn. If you made less then $400, you are exempt from paying self-employment taxes, however, you'll still need to pay income tax.
Regardless, you can check your account on grubhub.com or the app to receive your 1099 form electronically. If you meet the requirements for a 1099-NEC or 1099-K, you'll be able to download your 1099 form straight from the driver app. In the future, you could opt to receive your forms electronically by email on the app. Having a form will make it a lot easier to file your taxes on time and avoid any late penalty for filing a 1099.
Taxes You'll Owe As A GrubHub Driver
Since you are considered a self-employed business owner, you'll need to pay Self-Employment taxes. Self-employment taxes are made up of Social Security (12.4%) and Medicare taxes (2.9%).
You'll also be responsible to pay for income taxes. Depending on where you live, your filing status, and the tax bracket you are in, you will pay a different tax rate.
To easily find out how much you'll owe, try our free 1099 calculator to find out. If you feel overwhelmed by your tax liability, we'll show you a quick n' easy way to reduce how much you'll owe, maximize your deductions by using a receipt organizer.
Quarterly Taxes
The U.S. operates on a system that makes you pay taxes throughout the year instead of all at once. You'll need to file estimated tax payments 4 times throughout the year. You can calculate how much you'll owe by taking your total tax liability from the previous year and dividing the number by 4. If this is your first year as an independent contractor, you will need to make an estimate of how much money you plan to make this year.
The due dates for quarterly tax payments are:
- April 15
- June 15
- September 15
- January 15 of the following year
You can send payments electronically through the IRS website.
A penalty may be imposed if you do not pay enough withhold and pay enough on your quarterly tax payments.
List Of Tax Deductions Available to GrubHub Drivers
One of the great perks of being a 1099 driver is you can lower your taxable income with write-offs. Here is a list of 1099 deductions that GrubHub drivers can take advantage of.
- Cell phone usage deductions (for GrubHub business use only)
- Mileage deduction: You will have to keep track of the miles you drove for each job and calculate how many cents per mile is deductible (check your IRS guide).
- Gasoline
- Car payments
- Parking and toll fees
- Vehicle maintenance and repairs
- Deductible travel expenses (use a travel expense tracker)
- Health insurance premiums
- Tax preparation fees
- Accessories such as cell phone holders and chargers
If you want to save yourself the time of tracking receipts, we recommend you use our 1099 expense tracking software. Our app connects to your bank account and credit card statements to automatically record all of your tax deductions so you can relax when tax time rolls around. Try a 14 day free trial on the house.
Time To File Your GrubHub 1099 Taxes!
It doesn't matter if you are a delivery driver part-time or full-time, you need to properly take care of your taxes to avoid fees or penalties. We hope you found this helpful to guide you through how to take care of your taxes.
Now that you have completed the article, it is time to file your GrubHub tax return! We recommend using our tax receipt organizer software (available for desktop and mobile) so you can keep track of all of your GrubHub business expenses!
Please talk to a tax professional for advice if you have any questions.
