Charging scooters can be great supplemental income. And some people are even able to charge scooters as a full time job.
To make the most out of your time charging, you need to you fill out your tax forms correctly so that you do not overpay in taxes.
As a 1099 contractor, you’ll have to file the same taxes as small business owners. These taxes are much more complicated than the taxes of full time employees working on W2 or W4. Though, don’t fear! We are here to walk you through it.
Bird, Lime, and Skip all use 1099 contractors. Other scooter companies like Jump, Spin, Razor, Lyft, and Uber have other employment contracts. This guide is for 1099 contractors.
Taxes Were Not Being Withdrawn From Your Payouts
If you’re used to working W2 (aka full-time with benefits), it may come as a shock that taxes weren’t being withdrawn from you 1099 pay stubs during the year. Hopefully that’s not a surprise and you’ve been setting money aside.
Normally, 1099 contractors are required to pay estimated taxes (also known as quarterly taxes). That means paying taxes on your income every three months. While this is time consuming, it’ll help you keep track of how much money you are making, and avoid the IRS interest penalty.
Since taxes were not being withheld from your paychecks, you will have to pay taxes on your contractor income from 2018. Taxes will be due Monday, April 15th 2019.
You Will Likely Owe the IRS Money
If you earned more than $600 from a 1099 source, you’ll need to pay taxes on it. Your employer has already notified the IRS about paying you so there’s no getting out of it.
And it’s quite expensive. For example, if you made $50,000 in 2018 (after tax write offs), you should expect to owe about $15,000. The exact amount you’ll owe depends primarily on one thing: how much you can claim in tax write offs.
If you do things right, you should ideally be paying close to nothing on your scooter charging 1099 taxes.
Scooters Companies Will Send You a 1099
Typically in the last week of January, companies that paid you as a 1099 contractor will send you a 1099 form by mail or email.
This form is important because you’ll need it to file, and because it contains significant tax write offs (for example, the cut that the platform takes).
Later this month, we’ll publish a post with information about how to interpret this form. If you choose to use Keeper, our tax partner, you can just send them a picture of your 1099 and they will figure out the deductions for you.
Save a Lot of Money by Claiming Expenses as Tax Write-Offs
This is the part where you can save serious money. Use our tax write off guides to identify which of your purchases qualify as tax write offs – it’s probably more than you think!
For example, forgetting to include something small, like claiming the home office deduction if you’re using your garage to charge scooters, could easily be worth $80 / month which is nearly $1,000 in tax write offs at the end of the year.
Here’s a list of tax write offs scooter chargers commonly miss:
If you don’t want to track your receipts during the year, you can use Keeper to automatically record tax write offs from your bank statements.
While Keeper doesn’t file your taxes for you, it’ll format everything in a way that makes it super easy to plug into whichever e-filing solution you prefer, or you can put them in touch with your accountant and they’ll ensure that you are maximizing your write offs. Most accountants are too conservative and don’t have an incentive to dig through your bank statements like Keeper does!
File Your Taxes Online to Save Time and Money
Trying to file 1099 taxes yourself isn’t fun and we don’t recommend it. An accountant is hit or miss (depending on how much experience they have with 1099), and quite expensive. We recommend just doing it online with one of the many services available.
If you’re willing to pay $100+, you can use H&R Block ($117), or TurboTax ($130). If you want something cheaper and are willing to put up with a less appealing user experience, we recommend Credit Karma Tax (free!), or TaxSlayer ($47).
It doesn’t really matter which service you use, as long as you are claiming as many tax write offs as legally possible. Do things right and you should be paying close to $0 in taxes on your scooter charging 1099 income … Keeper Tax makes sure of that.
Disclosure: We have an affiliate partnership with the Keeper team. But we highlight their product because we use it ourselves!
Disclaimer: The information contained in this Guide is not offered as legal or tax advice. The U.S. federal income tax discussion included in this Guide is for general information purposes only and is not a complete analysis or discussion of all potential tax consequences that may be relevant to a particular individual. In light of the foregoing, each individual should consult with and seek advice from such individual’s own tax advisor with respect to the tax consequences discussed herein. Any information contained in this Guide is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the U.S. Internal Revenue Code of 1986, as amended.