In recent years, food delivery apps have become more popular among people for all the right reasons. These apps have completely changed the way people used to order food from restaurants or shop for groceries. Modern customers wanted convenience, and food delivery services have surely delivered that.
One such food delivery service that grabbed the most people’s attention was Postmates. Since its launch, it has been making quite a buzz on the Internet. From being operational 24/7 to giving customers a choice to order almost anything, it has become a part of people’s daily lives.
After the COVID-19 pandemic, the demand for various food delivery services, including Postmates, has dramatically increased. It, of course, has created a fantastic opportunity for people looking for a side job to drive, deliver food, and increase their earnings.
Working as a Postmates driver definitely has many perks. From choosing your working hours to getting paid instantly, and working at your own pace, you can do it all by being a Postmates driver.
However, it is worth keeping in mind that Posmates drivers are not regular employees. They are under an independent contract, and they will have a slightly different tax return.
Instead of deducting the tax amount from the driver’s salaries, Postmates leave that to the employees themselves. The responsibility of filing the taxes as a Postmates 1099 worker might feel stressful. However, armed with the right information, it will be much easier than you think.
Scroll down to learn everything you need to know about 1099 forms!
When do you get a 1099 form?
As mentioned above, drivers working for Postmates will not be considered regular employees. Instead, they will be under independent contracts.
Therefore, the most common tax form received by independent contractors is the 1099 form. Now you must be wondering when do you get it? What is the requirement for it? You will only get a 1099 form if your earnings exceed $600 in a year.
If you don’t meet this requirement, you will not be getting a 1099 form. Does this mean you will not have any taxes to file? Of course not. Whether you get a 1099 form or not, you still need to pay taxes on your earnings to the Internal Service Revenue.
What kinds of forms may you get as a Postmates driver?
Form 1099 refers to a collection of forms that report self-employment income to the Internal Revenue Service.
From freelancers to contractors, 1099 forms are sent to every worker under an independent contract by the client or company that has paid them. In the case of Postmates drivers, they will receive the 1099 forms from Uber (Uber bought Postmates in 2021).
The types of 1099 forms drivers usually are based on a few factors – how much money you made and how you earned it. Here are the kinds of 1099 forms that Postmates drivers can get:
Postmates drivers who earn at least $600 in a year will get a 1099-NEC form. From referral payments to earnings and any other kind of payment that comes through Postmates, every payment is included in the annual earnings of a driver.
In 2021, 1099-K were sent only to drivers who earned more than $20,000 in a year. However, at the start of 2022, the requirement for 1099-K changed. Now, it will be sent to every driver who has earned more than $600 in a year for Postmates deliveries.
How can drivers get their 1099 form from Postmates?
The Internal Revenue Service strictly instructs Postmates to make their 1099 forms available by January, so the drivers can have plenty of time to pay the taxes on their earnings.
So now you must be wondering how you can get them? There are two ways to get your 1099 form as a Postmates driver – access them digitally via Driver Dashboard in the Postmates app or choose to receive them via mail.
However, what if it is still not on the Driver Dashboard or delivered to you via mail? In that case, you must check thoroughly whether you qualify for it or not. Contact the Uber Support team for guidance if you do qualify for the 1099 form but have not received it.
How to file the taxes as a Postmates driver?
The perks and benefits of working as a Postmates driver might attract many people. However, the responsibility to file their own taxes seems quite a daunting task to most of them.
If you fall in the same category, too, stress no more. Scroll down to learn the basic five steps of filing your 1099 taxes as a Postmates driver:
Step #1: Determine what taxes drivers have to pay
Depending on your total earnings, it might be clear to you what type of 1099 form you might be receiving. However, your job is still not over yet.
Next, you need to determine what kinds of taxes you are required to pay. As a general rule, all the self-employed people (under independent contracts) have to pay federal, state, and self-employment taxes.
However, if your earnings are less than $400, you do not have to pay the self-employment tax. Also, if your earnings from Postmates deliveries are less than $400 and you do not have any other source of income, you do not have to pay taxes at all.
Step #2: Get your 1099 form from Postmates
If you have earned more than $600 in one year through Postmates deliveries, the company will send you a 1099 form documenting all your earning details. Usually, Postmates drivers get their 1099 forms till January 31st or the first week of February.
Without getting a 1099 form, you will not be able to pay your taxes on your earnings to the IRS. If the expected date to receive the 1099 form has passed, contact the Uber Support team immediately.
Step #3: Compile your Postmates expenses
Sometimes the tax amount the drivers have to pay is quite a lot. However, writing off the purchases you made during your deliveries for the company can help lower the amount of tax.
However, you will not be able to put write-offs on your 1099 form if you have not kept track of your Postmates expenses. Therefore, it is quite essential to keep track of everything you buy for Postmates. Else, be prepared to pay a huge tax amount to IRS.
Step #4: Fill out your Schedule C
Schedule C is a section where you report your self-employment income and write-offs when filing for tax returns.
Step #5: Pay your taxes before the deadline
The last date to file the 1099 taxes is April 15th. However, depending on how much money you have earned, many drivers might get the option of filing their taxes quarterly. Here are the dates for quarterly tax payments:
- The first installment on April 15th
- Second Installment on June 15th
- Third Installment on September 15th
- Fourth Installment on January 15th
By breaking down the daunting task of filing your 1099 taxes in simple steps, it can become less challenging than it may seem to you at first.
What can you deduct from the 1099 tax payment as a Postmates driver?
All the Postmates drivers have an opportunity to significantly reduce their tax payments by writing off what they purchased for work like car insurance, fuel, and much more. By doing so, Postmates drivers will be able to reduce the tax amount and save a lot of money for themselves.
However, drivers can only write off what they have spent while doing their job. Therefore, personal expenses cannot be mentioned in the write-offs for the dedication of a tax amount. Also, it is worth remembering that drivers are not allowed to write off the whole expense. Instead, partial expenses should be written.
For example, if you drive your vehicle 200 miles a week, only 100 of them are for deliveries, and the rest are for your personal usage. Therefore, drivers are only allowed to write off 50% of their insurance, registration, and lease costs.
Here are a few most common Postmates tax deductions:
- Car insurance
- Vehicle registration
- Parking and toll fees
- Lease payments
- Bike and helmet
- Repairs and maintenance charges
- Hot food storage bags
- Postmates commission fees
- A portion of your phone bill
Postmates is a reliable company that knows how to take care of its drivers. If you work as a Postmates driver, you will get many perks and benefits. From flexible working hours to instant payments, it will be a great work opportunity to look for a side job to earn a little extra.
However, make sure to put your tax payment date on your calendar. If you ever miss a due date, it will become a troublesome situation for you. The Internal Service Return will impose a hefty penalty on you, including up to 25% interest on your tax payment.