This past year was the first year that I was fortunate enough to work from my home. Working from my home has been a wonderful change for both personal and professional reasons. The only thing that caused a slight issue was the tax filing changes that I had to endure. The office in my home was now considered a tax deduction. I had to get some help learning how to deduct the things that are allowed on my federal taxes. If you are new to working from home and have a home office, this blog can help you learn what you need to know before tax time rolls around.
With the success of grocery and food delivery apps such as Seamless, Grubhub, UberEats, Shipt, and Instacart, there are more opportunities than ever to do delivery work as an independent contractor. As an independent contractor, you can run and structure your own delivery business, where you work with multiple different companies. If you are running your own delivery business as an independent contractor through the wide array of delivery apps that are available today, you are going to want to make sure that you know how to do some basic accounting and record keeping in order to accurately complete your taxes come tax time.
#1 Keep Track of Your Mileage
One of the most important deductions you can make on your taxes as a delivery driver is through the mileage claim. You are able to claim all the miles that you drive for business. As a delivery driver, that can add up to a really big deduction at the end of the year. If you use your car for personal use at all though, you are going to need to keep careful track of the miles that you drive.
You can do this by keeping a mileage log. You can write the mileage at the start of your day, starting at your home or wherever you begin your day. Then you can include all the mileage you do for work.
For example, you can include the mileage from driving to the store, to your client's home, and then to the store again, and to your next client's house. All the driving that you do for work counts. Make sure that you write down the mileage you drive each day and details about the driving that you were doing.
For example, you could write that you made five food deliveries and list the app that you worked for, the business you picked up the food for, and the addresses you delivered the food to. The more detailed, the better.
#2 Keep Track of Tips
Tips and wages for your work are calculated differently when it comes to tax time. That is why you need to keep track of the tips that you make. At the end of each day, make a list of each tip that you received for your delivery duties. Add up the number of tips that you make at the end of each day, and keep track of how much you make in tips each month. This will help you when you do your taxes at the end of the year, as tips are treated differently than regular wages.
#3 Keep Track of Payment
When you are working with various delivery apps, it is important to keep track of how much money you make from each app. At the end of each week, you are going to want to input the money that you made working for each app into a spreadsheet or accounting program.
This will allow you to see how much money you are making. You can use this information to determine how much money you should be saving as well and putting aside for taxes.
#4 Pay Taxes Each Quarter
As you are operating your business as an independent contractor, you want to make sure that you pay your taxes each quarter. This will save you from expensive penalties down the line.
As an independent contractor working as a delivery person with various apps, you are going to want to find an accountant who can help you set up a system for keeping track of mileage, tips, payment, and other businesses expenses. Having a system in place will help ensure that you pay the right amount of taxes each quarter and will help you complete your taxes at the end of each year.
For more information on business accounting, contact a company such as Emerald Financial Partners.
Share5 September 2018
