If you're a dog walker, then you might be wondering how to handle the taxes on your Rover 1099 or Wag taxes. Well, the team at Bonsai is here to help. We will show you some tips and tricks that will let you avoid penalties for not filing 1099 or paying your taxes when due. Plus, it'll save you money in the long run too.
In this article, we'll go over the different types of IRS tax forms you'll receive, how to calculate your 1099 taxes for how much you owe, quarterly estimated taxes, and we'll show you an easy way to maximize your tax liability with 1099 tax-write-offs.
This will be your one-stop guide to reporting everything about your form 1099. Now, without further ado, let's get started.
Note: if you would like to make your Rover freelancer taxes a breeze, use Bonsai Tax. Our tax software helps you organize business deductions, remind you of filing deadlines and estimate your taxes owed. You'll be able to have a peace of mind for your taxes while you watch and babysit furry little friends. Try a 7-day free trial today.
When Will You Receive A 1099 From Rover?
If you take care of dogs for the Rover app, you are considered an independent contractor and not an employee.
A 1099 tax form is a dedicated document for independent contractors or self-employed business owners. Rover is obligated by the IRS' requirements to send out the tax forms by January 31. There are many reasons why you might not receive a 1099 tax form, but we'll talk about that later.
You'll receive a 1099 form -K or -NEC depending on how much money you earned and what platform your payments were dispersed from, determine which tax form you'll receive.
Let's break down the two types of 1099 forms you'll deal with as Rover contractor.
A Breakdown Of The IRS Tax Forms Rover Dog Sitters Receive
Here are the requirements for when you will receive each tax form.
If you withdrew more than $600 in the calendar year in Rover payments, you will get a 1099-NEC tax form (before 2021, you'd get a 1099-MISC) sent to the address displayed on your W-9 by January 31. An electronic copy of your 1099 tax documentation will be sent by email as well. To obtain a print copy of your tax information, simply contact Rover via email.
You will not receive a 1099 from Rover if you withdrew payments via PayPal or other third-party processors. Instead, you'll get a 1099-K and other tax documentation from these platforms i.e. PayPal 1099. You'll be responsible for paying taxes based on these platform's reporting rules instead of Rovers.
You will also receive a 1099-K if you've had over 200 transactions as well as made more than $20,000 in the last calendar year to your Paypal account.
If you made less than $600 through Rover's platform, you might not receive a 1099. The IRS does not require companies to provide 1099 forms to those who made less than $600, however, you still need to pay taxes on the income. A copy of your earnings is sent to the IRS by January 31 as well. Just be sure to stay on top of when 1099s are due.
If you made less than $400, you are not required to file 1099 taxes, however, you still need to pay federal income tax.
You can easily access all of your earnings information and tax documentation from your account on the website via rover.com.
Double-check the information. The 1099-NEC Box 1 total should have all the transactions and equal the payments you received through Rover in the last calendar year. This box is for all "nonemployee compensation". If you need more time, you can file a 1099 extension to receive more time.
If you need help with your taxes, contact a tax advisor or professional.
Contact customer support if you earned more than $600 but you did not receive a form 1099 from Rover. These forms need to be filed before April 15th to avoid a 1099 late filing penalty.
Calculating Your Independent Contractor Taxes
It's time to talk about the not-so-pleasant part of the article: how much you need to pay in taxes to Uncle Sam.
The self-employment tax rate for 2021 is 15.3 percent of net earnings. That rate is made up of a 12.4 percent Social Security tax and a 2.9 percent for Medicare tax.
It should be noted, the first $142,800 in earnings is subject to the Social Security component. It was previously $137,700 in 2020.
You can easily use our 1099 tax calculator to see how much you'll owe in Rover taxes.
Pay Your Estimated Quarterly Taxes
The U.S requires independent contractors to pay taxes four times a year instead of all at once. You can calculate how much you need to pay in estimated taxes by adding up all of your tax liability for the previous year or self-employment tax, income tax, and any additional taxes and divide that number by four.
There are specific dates you need to send your payments to the IRS.
The due dates for your Rover estimated taxes are:
- April 15
- June 15
- September 15
- January 15
There are penalties for missing estimated payments, underpaying your duty, and late filings. The IRS calculates your late filing penalty for your quarterly taxes by estimating how much you should have paid each quarter and then determining a quarterly tax penalty.
The IRS then takes the percentage or penalty rate to figure out your fees for being late or underpaying the taxes you owe.
if it's a sitter's first year as an independent contractor, they will not suffer any penalties for not paying their quarterly taxes. Also, if you provide an authorized reason for why you didn't pay, like disability or death in the family to name a few, you will not be penalized for your taxes.
The most hassle-free way of paying your 1099 quarterly taxes is by using the IRS direct pay.
Tax Deductions Available to Rover Sitters
The beauty of being a 1099 contractor is you are considered a small business and can take advantage of tax write-offs related to running your Rover sitter service. All you need to do is fill out a Schedule C. A Schedule C or Form 1040 is a form that reports your self-employment earnings (profits and losses). Keep all of your business expense receipts to properly record tax deductions.
Some common self-employed tax deductions you can use to minimize your tax liability are:
- Treats or goodies
- Leashes, harnesses, or walking vests
- Tennis balls, frisbees, plush toys
- Supplies like wipes or doo doo bags
- Cell phone bills are partially deductible
- Car expenses related to driving for Rover (gasoline, insurance, repairs, etc)
- Transportation expenses or tracking miles for taxes
You are responsible for tracking and keeping documentation of all these receipts. If you are looking for a completely hands-free way to organize your expenses and save cash, try Bonsai's 1099 expense tracker.
Now You Know What To Do When You Receive A 1099 From Rover
We hope this article answers all the questions about handling your 1099 Rover tax return. Remember, you should receive your form shortly after January 31st, and. you'll need to file a Schedule C along with your form 1099. These tax forms can be found online on the IRS website. If you have any related questions to anything about getting a 1099 from Rover or how to file, contact a professional tax advisor for a quick discussion or advice. Also, for more information and answers to related questions about Rover taxes, they have an FAQ section along with customer support via Rover.com.
Disclaimer: the information we provide here is not tax advice. Contact a tax advisor for answers to your questions on how to report your income as well as any 1099 reporting tips.
