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Rover tax deductions & How to report rover income on taxes

As a Rover sitter, you’re considered self-employed by the IRS. As a result, you’ll have to pay self-employment tax on your Rover earnings, along with federal and state income taxes.
rover-sitter-taxes
Rover tax deductions & How to report rover income on taxes
The IRS consider a Rover Sitter as self-employed. Here's everything you need to know about calculating your taxes as a Rover sitter or dog walker in 2023.
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Rover offers a rewarding experience and a reliable source of income. Taxes as a Rover sitter, on the other hand, can be a bit frustrating, especially if you don’t know where to start.

Whether you are a Wag 1099 dog walker or a Rover Sitter, you will have to pay taxes on your income. With Beem, America’s first Al-powered Smart Wallet App, you can file your taxes as Rover sitter at the best prices and with utmost ease. We’re going to simplify the process of filing taxes as a Rover sitter/dog walker for you, no matter how complicated it may look.

Understanding Rover

In Rover, pet-sitting and dog-walking businesses can set their own hourly rates for walking pets. For purposes of taxation, Rover gig workers are considered self-employed. Dog walkers who earn money through Rover will have to pay a self-employment tax of 15.3%. While you earn money, you must pay income taxes to the federal government and your state government.

Depending on your tax bracket, you will have to pay income tax on the combined income from your full-time job and Rover side hustle. 

does rover take out taxes

No, Rover does not automatically withhold taxes from your earnings as a pet sitter or walker. Here’s why:

  • Independent Contractor Status: Rover classifies its service providers as independent contractors. This means you are responsible for managing and paying your own taxes.
  • Income Taxes: Income earned through Rover is subject to federal and potentially state income taxes. Based on your annual earnings, you will likely need to file estimated quarterly taxes throughout the year.
  • Self-Employment Tax: As an independent contractor, you’re responsible for paying both the employer and employee portions of Social Security and Medicare taxes (collectively known as self-employment tax). This is currently a 15.3% tax rate.

What Rover Provides

  • 1099 Forms: If you earn over $600 in a calendar year and receive those payments through Stripe (Rover’s payment processor), Rover will send you a 1099-K form for tax reporting purposes. If you do not meet these criteria, you still need to track your income independently.

how to report rover income on taxes

As a Rover sitter/dog walker, you will be issued a 1099-NEC tax form if you received more than $600 from Rover payments during a calendar year (a 1099-MISC tax form will be issued before 2021). You will receive the 1099-NEC tax form at the address on your W-9. Additionally, you will receive an email with a copy of your 1099 tax form.

You should include all Rover transactions in Box 1 of your 1099-NEC for the last calendar year. If you need more time, you may request an extension of the 1099 form. For assistance filing taxes, you are advised to consult a tax advisor or professional.

In addition, you will receive PayPal 1099 if you got payments through PayPal or another third-party processor. Upon making $20k or more to your PayPal account and having 200 transactions in the past year, a 1099-K will be issued.

If you make less than $600 on Rover, you may not receive a 1099 form. If your company does not issue you a 1099 form, you still need to pay taxes on your income. 

is rover considered self employment?

Absolutely! Rover classifies its pet sitters and walkers as independent contractors. This means you are considered self-employed when working through the Rover platform. Here’s why:

  • Control Over Your Work: You have significant freedom in choosing:
    • The types of services you offer (such as dog walking, boarding, house sitting, etc.)
    • Your service rates
    • The clients you accept
    • Your work schedule and availability
  • No Employee Benefits: Rover does not provide benefits typically associated with traditional employment, such as:
    • Health insurance
    • Paid time off
    • Workers’ compensation
  • Tax Responsibility: As an independent contractor, you are solely responsible for:
    • Paying income taxes on your Rover earnings
    • Paying the full amount of self-employment tax (normally the employer/employee shared Social Security and Medicare taxes)

Estimated Quarterly Taxes

The United States has a four-time tax payment system instead of a single payment at the end of the year for independent contractors. The estimated tax payment you must make depends on the amount of taxes you owe. Divide your total tax liability for the previous year by four while taking self-employment tax, income tax and any other taxes into account.

It is important that you send your payments by the dates specified by the IRS. To avoid the 1099 late filing penalty, you need to submit all forms and file your taxes by April 15.

Remember The Deadline

Due dates for estimated quarterly taxes for Rover sitters and dog walkers working as independent contractors as per IRS in 2023 are:

  • April 18
  • June 15
  • September 15
  • January 15

If you fail to pay your duty on time, miss an estimated payment or miss an estimated payment, you will be penalized. 

does rover report to iRS?

Yes, Rover does report to the IRS under specific circumstances:

  • You earned over $600 in the calendar year AND: This income was processed through Stripe, Rover’s payment processor.
  • You had at least 200 transactions processed through Stripe.

If you meet these criteria, here’s how Rover reports to the IRS:

  • 1099-K Form: Rover will file a 1099-K form with the IRS and with your state’s tax authority (if applicable). This form summarizes your gross income as processed through their platform.

Tax Write-Offs As A Rover Sitter

The advantage of being a 1099 contractor is that you are considered a small business owner, which allows you to deduct different costs such as marketing, advertising, support and operational expenses.

In order to file your self-employment income tax return, you need to complete a Schedule C, also known as Form 1040. A Schedule C includes both your profit and loss from self-employment. Keeping receipts will help you deduct every business expense correctly.

Self-employed individuals may be able to reduce their taxable income by taking the following tax deductions:

Direct expenses 

  • Rover fees
  • Owner refunds from cancellations
  • Cost of individuals you employ (i.e., payroll costs)
  • Out-of-pocket unreimbursed business expenses such as dog walking shoes, pet harnesses or leashes and pet food purchases.
  • The cost of managing your business, including legal or accountancy fees.
  • Public transportation expenses such as bus, train or ride-share costs you pay to travel to customers.

Automobile Expenses 

If using the Standard Mileage Rate method, business mileage and interest on a loan taken out to buy your vehicle can be deducted while filing taxes.

However, if you are using the Actual Expense method, expenses incurred in cleaning and maintenance services such as car washes and cleaning supplies are tax-deductible. Your Section C form will include a deductions section. Before claiming self-employment deductions, make sure you have all receipts stored or documented.

Taxes On Self-Employment (Social Security & Medicare)

Self-employment is a benefit of being a dog walker/Rover sitter. Being your own boss comes with a lot of benefits, but it also means you must file and handle your taxes properly.

It is your responsibility to pay your own Social Security and Medicare taxes as an independent contractor. In many cases, you will be taxed on some of your earnings by your employer if you work full-time. In the case of a 1099 contractor, you are responsible for all the taxes.

It comes out to 15.3% for self-employment taxes in the 2023 tax season. There is a 12.4% rate for Social Security (old-age, survivors, and disability insurance) and a 2.9% rate for Medicare. 

It’s still important to report even if you don’t get a 1099 for earnings less than $600. The income tax you owe on your earnings is self-employment tax. There is only one exception if your earnings are less than $400. The self-employment tax is not required in this case, but you will need to file an income tax return on your net earnings.

If your net earnings from self-employment were more than $400, you still have to file an income tax return as well as pay for Social Security and Medicare.

Also know about: Start Your Side Hustle

Conclusion

It may be difficult for you to process the tax information for your Rover 1099 if you are a dog walker. Taking advantage of some simple tips and tricks will help you avoid penalties for not filing your 1099 or paying your taxes on time. You can avoid penalties as well as save money in the long run. Check out Beem to file your federal and state taxes without any hidden charges and get the maximum refund.

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This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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