As an independent worker, you have to bear the responsibility of filing your Postmates taxes. But don’t worry! It may not be as complicated as it appears. Working as a Postmates delivery driver has its advantages.
From the freedom of choosing your work hours to getting paid instantly and working at your own pace, Postmates has become a popular source of income for many freelancers and drivers. It provides one-off delivery tasks at your fingertips, which is perfect for freelance delivery drivers who are always on the go. Beem, America’s first Al-powered Smart Wallet App, is one platform that can help you file your taxes this season and get the maximum refunds. You can also try Beem’s free Tax Calculator for a 100% accurate federal and state tax estimate.
We will break it down for you in simple terms on how to file taxes for Postmates so that you can do this easily without any stress.
Do I Have To File Postmates Taxes?
As a general rule, all self-employed individuals are required to pay the following three taxes:
- Self-employment taxes
- Federal income tax
- State income tax
The self-employment taxes, also known as FICA (Federal Insurance Contributions Act), comprise Social Security and Medicare taxes (which are otherwise paid by the employer if one is a salaried employee). This tax rate is 15.3% of net earnings in the 2023 tax season.
Postmates Taxes Information You Must Know
If you work as an independent contractor, you are your own boss. This means that you are accountable for reporting your FICA taxes both as an employer and employee. However, you can write off the employer portion under your tax deductibles. Also, if your net earnings are less than $400, you may not have to pay any self-employment taxes.
When it comes to the amount of federal and state income taxes you are liable to pay, it depends on which state you live and what income bracket you belong to. Your federal tax rate might be between 10% and 37%. State taxes, on the other hand, are governed by the tax laws of the respective state.
Some states follow a flat tax system, where everyone pays the same amount of tax. Other states have progressive tax systems, which means your tax rate will depend on your income level and the rate generally ranges from 0% to 10.75%.
Forms Required For Postmates Taxes
Form 1099 is a collection of forms that report non-wage income to the IRS, including income from self-employment. These forms are sent to freelancers or independent contractors by the entity that paid them.
If you made at least $600 during the tax year, Postmates will send you a 1099 form detailing your earnings on the platform. You can expect to receive this form by January 31 during the tax year.
The type of 1099 forms you receive will depend on factors like how much money you earned from Postmates, and in what way you earned it.
Here are the 1099 form categories that you may receive from Postmates:
Form 1099-NEC: You will receive this form if you made at least $600 from Postmates through non-trip earnings like referral payments, bonuses and other income that comes from something other than deliveries.
Form 1099-K: If you got more than $20,000 in gross delivery earnings and completed more than 200 trips.
You may also receive an unofficial document from Postmates during the tax season which provides a breakdown of some important tax information, including your annual gross earnings. It also shows the business-related expenses which you can deduct from your taxable income, such as service fees and commissions
Also know about: how to save tax
Get Your Forms from Postmates
The IRS requires Postmates to send you 1099 forms by January 31. There are two ways to get the relevant 1009 forms for Postmates driver tax information. One way is to access them digitally via the Driver Dashboard in the Postmates app. The other option is to receive the forms via mail. If you qualify for the forms but do not receive them, you are advised to contact the official concerned.
Compile Postmates Expenses To Earn Deductibles
Keeping track of all your business purchases made while working for Postmates can help you save a significant amount of time and money during the busy tax season. You are advised to maintain separate accounts for business and personal expenses to enable you to write off your business-related purchases and lower the amount of your taxable income.
Deductions For Postmates Taxes
You can bring down your taxable income to a significant extent by deducting the expenses you incurred for your job, such as petrol and auto insurance. By doing this, you can reduce the amount of taxes you have to pay and make additional savings. Remember that you’re only allowed to write off what you spend on doing your job, and not the whole expenses.
Some of the most common Postmates tax deductions include:
- Health insurance premiums
- Vehicle registration
- Car insurance
- Repair or maintenance
- Gas mileage deduction
- Parking and toll fees
- Depreciation of your car over the year
- Bike and helmet
- Lease payments
- Cost of hot bags and cold bags for food delivery
- Business-related phone bills
- Postmates commission fees
Once you have these in order, you file your taxes by filling out Schedule C. This is where you report all your income and write-offs.
When To File Postmates Taxes
For the 2023 tax season, the deadline for filing your taxes is April 18, 2023. Additionally, you will be required to file quarterly taxes depending on how much money you earned. Keep in mind that this is only true for self-employed workers who expect to owe the IRS at least $1,000 by the end of the tax year.
The quarterly taxes are paid on estimated quarterly incomes in four installments in a year.
The due dates for quarterly tax payments are as follows:
- April 18, 2023
- June 15, 2023
- September 15, 2023
- January 15 of the following year
Do not miss any of these due dates or you may end up paying late fees and penalties, including up to 25% interest on your tax bill.
Conclusion
By now, we hope you have understood all about the taxes for Postmates and be able to file your taxes easily and in an organized way. If you have any doubts, feel free to reach out to the tax professionals. Beem can help you in filing your taxes this season. You can login to Beem and start your tax filing process as soon as possible.
