Can I use FreeTaxUSA if I drive Uber and DoorDash?
I have been doing Uber and DoorDash deliveries for the first time this year. I filed with Freetax last year, can I file with them still?
Answers
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Hi knitting fun,
FreeTaxUSA can definitely still help you prepare your tax return. Our software supports everything you'll need!
If you work with Uber and DoorDash, then you are part of what the IRS refers to as the gig economy. The IRS explains that "people involved in the gig economy earn income as a freelancer, independent worker or employee. They use technology known as online platforms to connect them with customers to provide goods or services."
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If you work as an independent contractor in the gig economy, then you generally need to report your income as business income on Schedule C. To do that in the software, you can follow the menu path: Income > Business Income (Schedule C). You can create as many Schedules Cs as needed for your situation, so if you have more than one business, you can have a Schedule C for each one.
On Schedule C, you are able to account for your income and expenses (including vehicle expenses). Many gig workers receive a Form 1099-NEC, Form 1099-MISC, or Form 1099-K reporting sources of income for their work. Whether or not you receive a tax form reporting your income, you are expected to keep track of what you received throughout the year and report it on your tax return. It is important to keep good records — especially when it comes to your business expenses — so that you can back up anything you claim on your return.
As a gig worker, since you don't have an employer withholding income tax, social security tax, and Medicare tax from your paycheck, you need to pay those yourself. If you are employed elsewhere, you can fill out a Form W-4 with that employer and ask them to withhold additional taxes from your paycheck to help cover the taxes owed from your gig economy work. Another option is to make quarterly estimated tax payments through the IRS. You can find out more about estimated tax payments and how to pay them here:
When you file Schedule C, we will help you determine your net income, then self-employment (SE) taxes will be calculated on that amount using Schedule SE. The SE tax rate is 15.3%, which consists of 12.4% for social security and 2.9% for Medicare. The good news is that you get to deduct the employer-equivalent portion of your SE tax in figuring your adjusted gross income.
If you had additional withholding through another employer or if you made estimated tax payments throughout the year, then those payments will be applied towards your SE taxes. Any remaining balance will need to be paid by the due date of your tax return.
As you are preparing your Schedule C, it may be helpful to refer to the following IRS Publications for guidance:
-Publication 535, Business Expenses
-Publication 463, Travel, Gift, and Car Expenses
