1099 misc and schedule c
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As an Uber driver and therefore an independent contractor, you’ll receive a 1099 form instead of a W-2. Uber typically sends these out before or around January 31st.
Deciphering these two forms can be tricky, mostly because they contain a lot of information that isn’t particularly useful to you when you’re filing your taxes. In reality, there are only a few numbers that you need to be aware of when you’re using your 1099s to file your taxes.
We’ll walk you through the steps for using these forms to do your Uber taxes correctly!
Check out our Uber Tax Center to get answers to more of your top tax questions!
Uber reports earnings on two different forms: the 1099-MISC and the 1099-K. Here’s how to find your earnings on both forms:
You should definitely receive a 1099-K from Uber, because this is what reports your earnings in fares. What you’re looking for here is Box 1a - Gross amount of payment card/third party network transactions.
Uber will send you a different 1099-K for each state in which you've completed trips. So if you've completed trips in both New York and New Jersey, you'll get a 1099-K for each set of fares.
Funny name for earnings right? That’s because Uber is technically a third party network, meaning they facilitate your rideshare business by finding you passengers and transferring payment between the passengers and you. So instead of reporting that you did work for Uber, they report your pay as money earned via Uber.
Is your Uber 1099-K reporting a number higher than what you actually earned?
Don’t worry — this is normal, and the IRS instructions for this form actually require Uber to report the gross amount of payments that they facilitated. That gross number includes what you earned AND Uber’s fees. You will not, I repeat, will not, have to pay taxes on Uber’s fees. You will report the gross amount on the Schedule C, but deduct Uber’s fees as a business expense. No sweat, you will only pay taxes on what you actually earned, and we’ll show you how below.
Want a quick glance of what you earned in 2016? Use our Uber Tax Calculator to know what you’ll actually pay in Uber taxes.
If you receive a 1099-MISC from Uber, it’s because you’ve earned at least $600 from incentives or referrals. This is a gross number like you see on the 1099-K, but it does not include any Uber fees or commissions and should match exactly with what you received in payment from Uber for any promotions, incentives, or referrals. There are a lot of different sections of the form, but what you’re looking for is Box 7 - Nonemployee compensation:
Compare this number with your 2016 Uber Tax Summary for 1099-MISC earnings. They should match up.
However, if you didn’t receive a 1099-MISC, you may still have income to report! Uber only sends a 1099-MISC reporting incentive and referral income if you made at least $600, so even if you didn’t receive one, you should check your Uber Tax Summary to see if you received any of this type of income. You’ll see under the “1099-MISC Breakdown” whether you have income to report in addition to the income on your 1099-K.
Even though you didn’t receive the total amount reported on your 1099-K in your bank account, you still report that total (don’t worry, you won’t pay taxes on Uber’s fees). You’ll add that 1099-K gross number plus your 1099-MISC number to get total earnings (“Gross receipts or sales”). Your next move depends on whether you’re using an accountant, tax filing software, or filling out your own Schedule C:
- If you’re working with an accountant or tax preparer:Your accountant will know what to do with your 1099s. Make sure they also have your 2016 Uber Tax Summary and any business expenses you plan to write off (like mileage, passenger goodies, etc). Want to make your accountant’s day? The Stride Uber Tax Calculator creates an IRS-Ready report of your 2016 Uber earnings, 2016 taxes owed, plus automatically calculates mileage and other deductions you may have missed. Your accountant will be able to save you even more money with your Stride tax report, and it’s 100% free.
- If you’re filing using tax software: No adding is necessary for inputting the 1099-MISC and 1099-K. Your tax software will ask you to fill out information from the forms and calculate the sum for you. If you didn’t receive a 1099-MISC but have referral and incentive income to report, you can include it as “Other income” for your business.
- If you’re filling out a Schedule C: Add the 1099-K and 1099-MISC earnings amounts together. Then, report your total income (from your 1099-MISC and your 1099-K) all on Line 1 of your Schedule C. If you didn’t receive a 1099-MISC but have referral and incentive income to report, you can include it as “Other income” for your business.
This is where things get interesting. As mentioned above, your Uber 1099-K is that Uber’s fees are included in the number reported on your form. That means you’ll need to deduct it as a business expense.
First, you’ll need to sum Uber’s fees. These include fees like the booking fee, which is a separate flat fee added to every trip that helps support safety initiatives for riders and drivers. To add up Uber's fees to determine how much you should claim as an expense, first subtract what you actually earned (excluding referrals and promotions reported on the 1099-MISC) from gross earnings reported on the 1099-K and 1099-MISC. Stride’s free Uber Tax Calculator automatically calculates your actual earnings (minus Uber's fees) for you.
Here's another way to calculate this using your Uber tax summary, as outlined below:
1099 misc and schedule c
However, there are two times when an author would file a Schedule E:
- if you are no longer actively engaged in the business of writing, but are still receiving royalties from your books, or
- if you hold the royalty rights to a book you did not produce.
In both cases, the earnings from those books are considered passive. For example, after a writer dies, their books continue to sell and earn royalties. The person who inherits the rights to those royalties is not actively involved in the business of producing that product; therefore, the income is passively earned. Because this income is passive, it and any related expenses are reported on Schedule E.
To add credibility to non-ogre John's comments, the instructions for Schedule E state (on page 6, first column):
If you are in business as a self-employed writer, inventor, artist, etc., report your royalty income and expenses on Schedule C or C-EZ.
Schedule C is designed to capture all the expenses related to running a sole proprietorship, which is what you, as an author, are until you form a partnership or a corporation in some form. Most of us will remain a sole proprietorship for our lifetimes.
Since the IRS says those of us who are actively engaged in the business of writing should file Schedule C, and the instructions for Schedule E even say we should file Schedule C, why the debate? It all comes down to that nasty self-employment tax.
Self-employed individuals (Schedule C filers) can deduct the cost of health, dental, and qualified long term care insurance (maximum deduction amount established by age) for themselves and their dependents to the extent of their net income from self-employment (see IRS Pub 535 on this topic). The premiums must be paid out of your pocket, not paid by an employer. Schedule E filers are not considered self-employed and cannot take this deduction.
You earn $15,000 in royalties from your writing business in 2014. Expenses related to that business in 2014 total $7,000. Your net income from writing is $8,000 ($15,000 minus $7,000). You'll pay $612 in SE tax ($8,000 x 7.65%). You are a married individual and pay $5,500 in health and dental insurance premiums (out of your pocket, not paid by an employer), and $1,500 in long term care premiums for you and your spouse. Because the total of your health related insurance premiums, $7,000, does not exceed your self-employed net income of $8,000, you can deduct the full $7,000 on page one of your Form 1040 (line 29). In this case, it benefits you to file Schedule C, despite the SE tax. "Above the line" deductions - those taken on page one of your Form 1040 - reduce your tax liability by your tax rate. (Keep hanging on, we're almost done.)
Now I'm headed back to Forney County for a little mayhem and murder. Come join me. Nothing reduces tax-related stress like killing off a few characters.
Sorting out your Amazon 1099-MISC forms from KDP and CreateSpace (Tax Year 2015)
AMAZON KDP & CREATESPACE 1099-MISC TAX FORMS (YEAR 2015)
I received 12 different 1099-MISC forms for tax year 2015 from Kindle Direct Publishing (KDP), and 3 more 1099-MISC forms from CreateSpace. I obtained my KDP tax forms online, but received my CreateSpace forms in the mail (on February 5).
Check yours against my list below to see if you’ve received them all.
Also, my list below will help you check which international marketplace each form corresponds to.
Verify that the amounts are correct. Occasionally, a mistake is made. (One year, they issued replacements a few weeks after mailing the originals.)
Note that, contrary to rumor, there is NO limit of $600 for book royalties. For book royalties, the limit is $10, meaning that if you earned at least $10 in royalties, you should account for this in your tax return. Amazon will have sent the information to the IRS. Most authors can use Schedule C-EZ, but if you earned too much, you need Schedule C instead, and also if you earn enough, you need to file SE (in addition to Schedule C) for self-employment tax (but if you file SE, there is another place to deduct a little on the 1040). You can subtract reasonable business expenses. (If you feel that writing is a hobby, don’t go by your feeling: There is a chart on the IRS website that can help you determine whether or not the IRS will agree with you about this.) Note that I’m NOT an accountant or tax attorney, so I’m not qualified to advise you on your taxes. You should consult a qualified tax professional for help. I’m just trying to help you find all of your forms and get you pointed in the right direction, and if you do hire a tax professional, you should try to follow along to ensure that they aren’t making any mistakes.
Here are the 12 different 10&9’s that I received from KDP:
- Amazon Digital Services (United States)
- AMEU – UK Digital Services (United Kingdom)
- Amazon Digital Services CA (Canada)
- Amazon Australia Svcs (Australia)
- Amazon Mexico Svcs (Mexcio)
- Amazon Media EU SARL (NL) (Netherlands)
- Amazon Media EU SARL (IT) (Italy)
- Amazon Media EU SARL (ES) (Spain)
- Amazon Europe Holding Tech (France and Germany)
- Amazon Servicos de Varejo (Brazil)
- Amazon Digital South Asia (India)
- Amazon Svcs International (Japan)
Here are the 3 different 10&9’s that I received from CreateSpace:
- On-Demand Publishing (United States)
- AMEU – UK Digital Services (United Kingdom). It’s for print sales even though it says Digital, provided that you see CRTSPACE in the bottom left box.
- Amazon Europe Holding Tech (continental Europe)
You may have yet another 1099 if you use Amazon Associates, for example. This 1099 is designated ASSOC in the bottom left box.
How do I know which marketplace corresponds to which 1099? I visited KDP and CreateSpace and totaled up all the payments I received in USD from each marketplace in tax year 2015, and checked these numbers against my 10&9’s. You should do the same, just to make sure there were no mistakes.
When you log into KDP, click Reports, then click Payments. Next, choose the appropriate marketplace from the dropdown menu. Be sure to look at the Date column, not the Sales Period, and look for 2015.
Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers
- Volume 1 on formatting and publishing
- Volume 2 on marketability and marketing
- 4-in-1 Boxed set includes both volumes and more
- Kindle Formatting Magic ( coming soon )
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