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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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.
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.
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:
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.
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.
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.
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:
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.
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:
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.
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.
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!
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?