Tax season is in full swing, and if you're a GrubHub 1099 delivery driver, you need to start thinking about filing your taxes. It's time to put on your accountant hat and prepare for the upcoming tax year. Keep reading to learn more about GrubHub 1099s and what you need to do when they come knocking at your door.
We'll also talk about how you can use a tax app to track receipts and lower how much you need to pay to Uncle Sam at the end of the year. Now, without further ado, let's get into when you will receive a 1099 from GrubHub.
Note: If you want an app to organize your receipts, remind you of filing deadlines, and help you estimate your taxes, try Bonsai Tax. Our software could help make it easier to track your expenses and save you a lot of money from your tax bill. Users save on average of $5,600. Claim your 14 day free trial today.
The IRS requires businesses to send out 1099s via mail by January 31st to drivers who earned more than $600 through deliveries.
The 1099 form will have all your tax information detailing how much drivers were paid for each delivery they made during the year along with other important tax documents.
Depending on if you meet specific requirements, you'll be sent a different 1099 tax form.
Here are the different forms and qualifications.
The 1099-NEC is a form where folks use to report their non-employee compensation income.
In previous years, people would report this income on their 1099-MISC. However, in 2020, the IRS reintroduced the 1099-NEC to cover this portion of income. If you made over $600 on the GrubHub app, you should have received this form in the mail after January 31.
If you made $20,000 and over 200 transactions on the app, you'll receive a 1099-K. Vermont and Massachusetts GrubHub drivers will get a 1099-K regardless on if they made $20,000. If a driver in these States made over $600, they will get a 1099-K instead of a 1099-NEC.
If you met any of the requirements listed above and you did not receive the form, check the address on your GrubHub account. See if the information is incorrect because the form could have been sent to the wrong address.
Another reason why you didn't receive form in the mail, is if you earned less than $600. In this case, GrubHub is not required to send you a form, but you'll still need to owe taxes on the money you earn. If you made less then $400, you are exempt from paying self-employment taxes, however, you'll still need to pay income tax.
Regardless, you can check your account on grubhub.com or the app to receive your 1099 form electronically. If you meet the requirements for a 1099-NEC or 1099-K, you'll be able to download your 1099 form straight from the driver app. In the future, you could opt to receive your forms electronically by email on the app. Having a form will make it a lot easier to file your taxes on time and avoid any late penalty for filing a 1099.
Since you are considered a self-employed business owner, you'll need to pay Self-Employment taxes. Self-employment taxes are made up of Social Security (12.4%) and Medicare taxes (2.9%).
You'll also be responsible to pay for income taxes. Depending on where you live, your filing status, and the tax bracket you are in, you will pay a different tax rate.
To easily find out how much you'll owe, try our free 1099 calculator to find out. If you feel overwhelmed by your tax liability, we'll show you a quick n' easy way to reduce how much you'll owe, maximize your deductions by using a receipt organizer.
The U.S. operates on a system that makes you pay taxes throughout the year instead of all at once. You'll need to file estimated tax payments 4 times throughout the year. You can calculate how much you'll owe by taking your total tax liability from the previous year and dividing the number by 4. If this is your first year as an independent contractor, you will need to make an estimate of how much money you plan to make this year.
The due dates for quarterly tax payments are:
You can send payments electronically through the IRS website.
A penalty may be imposed if you do not pay enough withhold and pay enough on your quarterly tax payments.
One of the great perks of being a 1099 driver is you can lower your taxable income with write-offs. Here is a list of 1099 deductions that GrubHub drivers can take advantage of.
If you want to save yourself the time of tracking receipts, we recommend you use our 1099 expense tracking software. Our app connects to your bank account and credit card statements to automatically record all of your tax deductions so you can relax when tax time rolls around. Try a 14 day free trial on the house.
It doesn't matter if you are a delivery driver part-time or full-time, you need to properly take care of your taxes to avoid fees or penalties. We hope you found this helpful to guide you through how to take care of your taxes.
Now that you have completed the article, it is time to file your GrubHub tax return! We recommend using our tax receipt organizer software (available for desktop and mobile) so you can keep track of all of your GrubHub business expenses!
Please talk to a tax professional for advice if you have any questions.
A verbal contract (formally called an oral contract) refers to an agreement between two parties that's made —you guessed it— verbally.
Formal contracts, like those between an employee and an employer, are typically written down. However, some professional transactions take place based on verbally agreed terms.
Freelancers are a good example of this. Often, freelancers will take on projects having agreed on the terms and payment via the phone, or an email. Unfortunately, sometimes clients don't pull through on their agreements, and hardworking freelancers can find themselves out of pocket and wondering whether a legal battle is worth all the hassle.
The main differences between written and oral contracts are that the former is signed and documented, whereas the latter is solely attributed to verbal communication.
Verbal contracts are a bit of a gray area for most people unfamiliar with contract law —which is most of us, right?— due to the fact that there's no physical evidence to support the claims made by the implemented parties.
For any contract (written or verbal) to be binding, there are four major elements which need to be in place. The crucial elements of a contract are as follows:
Therefore, an oral agreement has legal validity if all of these elements are present. However, verbal contracts can be difficult to enforce in a court of law. In the next section, we take a look at how oral agreements hold up in court.
Most business professionals are wary of entering into contracts orally because they can difficult to enforce in the face of the law.
If an oral contract is brought in front of a court of law, there is increased risk of one party (or both!) lying about the initial terms of the agreement. This is problematic for the court, as there's no unbiased way to conclude the case; often, this will result in the case being disregarded. Moreover, it can be difficult to outline contract defects if it's not in writing.
That being said, there are plenty of situations where enforceable contracts do not need to be written or spoken, they're simply implied. For instance, when you buy milk from a store, you give something in exchange for something else and enter into an implied contract, in this case - money is exchanged for goods.
There are some types of contracts which must be in writing.
The Statute of Frauds is a legal statute which states that certain kinds of contracts must be executed in writing and signed by the parties involved. The Statute of Frauds has been adopted in almost all U.S states, and requires a written contract for the following purposes:
Typically, a court of law won't enforce an oral agreement in any of these circumstances under the statute. Instead, a written document is required to make the contract enforceable.
Contract law is generally doesn't favor contracts agreed upon verbally. A verbal agreement is difficult to prove, and can be used by those intent on committing fraud. For that reason, it's always best to put any agreements in writing and ensure all parties have fully understood and consented to signing.
Verbal agreements can be proven with actions in the absence of physical documentation. Any oral promise to provide the sale of goods or perform a service that you agreed to counts as a valid contract. So, when facing a court of law, what evidence can you provide to enforce a verbal agreement?
Unfortunately, without solid proof, it may be difficult to convince a court of the legality of an oral contract. Without witnesses to testify to the oral agreement taking place or other forms of evidence, oral contracts won't stand up in court. Instead, it becomes a matter of "he-said-she-said" - which legal professionals definitely don't have time for!
If you were to enter into a verbal contract, it's recommended to follow up with an email or a letter confirming the offer, the terms of the agreement , and payment conditions. The more you can document the elements of a contract, the better your chances of legally enforcing a oral contract.
Another option is to make a recording of the conversation where the agreement is verbalized. This can be used to support your claims in the absence of a written agreement. However, it's always best to gain the permission of the other involved parties before hitting record.
Fundamentally, most verbal agreements are legally valid as long as they meet all the requirements for a contract. However, if you were to go to court over one party not fulfilling the terms of the contract, proving that the interaction took place can be extremely taxing.
So, ultimately, the question is: written or verbal agreements?
Any good lawyer, contract law firm, or legal professional would advise you to make sure you formalize any professional agreement with a written agreement. Written contracts provide a secure testament to the conditions that were agreed and signed by the two parties involved. If it comes to it, a physical contract is much easier to eviden in legal circumstances.
Freelancers, in particular, should be aware of the extra security that digital contracts may provide. Many people choose to stick to executing contracts verbally because they're not sure how to write a contract, or they think writing out the contract terms is too complicated or requires expensive legal advice. However, this is no longer the case.
Today, we have a world of resources available at our fingertips. The internet is a treasure trove of invaluable information, platforms, and software that simplifies our lives. Creating, signing, and sending contracts has never been easier. What's more, you don't have to rely on a hiring a lawyer to explain all that legal jargon anymore.
There are plenty of tools available online for freelancers to use for guidance when drafting digital contracts. Tools like Bonsai provide a range of customizable, vetted contract templates for all kinds of freelance professionals. No matter what industry you're operating in, Bonsai has a professional template to offer.
A written contract makes the agreement much easier to prove the terms of the agreement in case something were to go awry. The two parties involved can rest assured that they're legal rights are protected, and the terms of the contract are sufficiently documented. Plus, it provides both parties with peace of mind to focus on the tasks at hand.
Bonsai's product suite for freelancers allows users to make contracts from scratch, or using professional templates, and sign them using an online signature maker.
With Bonsai, you can streamline and automate all of the boring back-office tasks that come with being a freelancer. From creating proposals that clients can't say no to, to sealing the deal with a professional contract - Bonsai will revolutionize the way you do business as a freelancer.
Why not secure your business today and sign up for a free trial?