Whether you are a Wag 1099 or Rover dog walker, you'll need to pay taxes on the income you make from the apps. Sure, it may seem like a complicated subject, but in this article, we're going to make it really simple for you.
It's not hard to figure out what needs to go on your Wag 1099 form, but there are some things that can trip up even seasoned business owners. From quarterly taxes to late filing penalties, we're going to break down everything so you know exactly what goes where and how much of it applies. Once you've done that, filing your taxes will be a breeze! Let's first go over what a 1099 form is.
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What Is A 1099 Form?
As Wag walkers, you are technically an independent contractor. What this means is that you will be receiving a 1099 form to claim your income from Wag. A 1099 form is simply a record sent to the IRS that an entity or person other than your employer gave or paid you money. You'll need this information to file your taxes at the end of the year. Depending on if you meet certain requirements, Wag or a different entity will provide a 1099 tax form to you at the end of the calendar year.
Now, let's talk about the 1099-NEC.
IRS Form 1099-NEC
The IRS 1099-NEC form is hands down the most common 1099 form sent out to freelancers. This form recently took over the reporting requirements for nonemployee compensation. Prior to 2020, the 1099-MISC was used for this. The requirement to receive this form is simply if you received more than $600 in payments from someone who is not your employer.
If you meet the requirements to receive a 1099, it will be available on the Wag Walker App by or before February 1st, 2021. Here's instructions on how to find it on the App.
- From the home screen, tap “Earnings” →
- Tap "View past payments" →
- Tap “Email me my 2020 1099” →
- Tap “Okay”
Who Will NOT Receive A 1099?
Not everyone who uses the Wag app will receive a 1099 tax form. There are some exceptions. If you made less than or under $600, Wag will NOT send you a 1099.
You can check your earnings on your account by:
- Logging into your payable account and selecting the "work" tab
- Setting the date range for a full year, and verifying if your total income is over 600$
We recommend you review the income information on your account to make sure everything is correct.
Other reasons why you may not receive a 1099 form may include incorrect information on your account. Be sure to double-check you have the correct and current address in the Wag app
Wag will send you a 1099-NEC form in the mail by January 31.
You can also receive your 1099 electronically via a link delivered to your email address with 1099 e-Delivery. Before you can receive a 1099 electronically, you must first complete the e-Delivery consent form. If you choose e-Delivery, you will not receive a paper copy. If you opt to receive your tax form electronically, a copy will be emailed by January 31st.
Filing Self Employment (Social Security & Medicare) Taxes
As a Wag walker, you are considered self-employed. Although there are a ton of benefits of being a 1099 worker, being your own boss also means you are responsible for properly filing and handling all of your taxes. As an independent contractor, you are held accountable to pay your own Social Security and Medicare taxes. When you work a full-time job, your employer typically retains some of your wages to pay for your Social Security and Medicare taxes. As a 1099 contractor, you need to pay all of it on your own.
The self-employment tax rate comes out to be 15.3%. The rate is 12.4% for Social Security (old-age, survivors, and disability insurance) and 2.9% for Medicare. To calculate how much you'll owe, try Bonsai's free self-employed calculator.
Filing Income Tax
Remember, even if you made less than $600 and you do not get a 1099, you must still report. You are responsible for paying self-employment tax and income tax on your earnings. The only exception is if you made less than $400. In this case, you will still need to to file an income tax return on your net earnings but you do not have to claim self-employment tax.
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.
Quarterly Estimated Taxes
As a Wag walker, you have to pay taxes on your income four times throughout the calendar year. These are called quarterly estimated tax payments. They are designed to help self-employed folks from being overwhelmed with one large tax bill at the end of the year. You simply approximate how much taxes you'll owe for a calendar year, divide that number by 4, and then make your payments by these dates:
- April 15
- June 15
- September 15
- January 15 of the following year
To send payments to the IRS, we recommend you use their direct pay online tool.
In order to avoid any penalties, you'll have to make payments on time and with the correct amount. If you pay less than your estimated tax liability, you would have to pay a tax underpayment penalty.
If you're expected to and forgot to pay quarterly estimated taxes, you still may pay at the end of the tax season with the rest of the late payment walkers, but you may be penalized with a fee.
Note: If you want to be reminded of all your filing deadlines to avoid any penalties, try Bonsai Tax. Our app will send you notifications for upcoming deadlines and update you if any due dates change. Our app could also help you automatically track your deductions by scanning your bank account. Try a 14 day trial on the house.
Tax Deductions Available To Wag Walkers
Throughout the calendar year, you'll want to keep track of all your business receipts for taxes. Purchases made to run your dog walking business as well as mileage can be deducted. That is why it is crucial to keep receipts for:
- poop bags or doggy wipes
- cell phone bills
- leashes
- mileage
- treats
- walking shoes
- public transportation
- parking meters
- tolls
- gas
- insurance/ registration
- car repairs
- frisbees or tennis balls
There will be a section for deductions on your Section C form. Be sure to have all receipts stored or documented before attempting to claim any self-employment deductions.
Note: If you want a hands-free way of discovering and tracking your deductions, try Bonsai Tax. Our expense tracking tax software will organize and record your write-offs so you can focus on walking dogs! In fact, our users save an average of $5,600 on their tax bill at the end of the year with our app. Try a 14 day free trial for yourself and see if you like it.
Time To File Your Tax Return
Hopefully, this tax guide has helped walk you through how to file your 1099 taxes for Wag Walker. Remember to pay your quarterly taxes throughout the calendar year and to keep all of your receipts for tax deductions.
Tax laws are always changing. We always recommend you consult with a tax professional if you have any questions about filing your 1099 tax return.
Try Bonsai Tax Today
With Bonsai Tax, you can get help with your Wag independent contractor taxes. We’re the only service that provides tax preparation and management for freelancers in addition to personal income tax prep services. You can do all of this without worrying about how it will affect any business deductions or credits because we handle everything! So if you need help filing your Wag 1099 taxes, make sure to try out our software today!
