As you get ready to file your taxes, you might be wondering: are my earnings through Instawork taxable? The short answer is: generally, yes. But your tax obligations will be specific to your circumstances.
We’re not tax or financial advisors, so if you have questions about your specific tax obligations, seek advice from a tax professional (we’ve provided links to some options below). We’ve also broken down some of the more general considerations into an easy-to-understand guide — read on to learn more.
1099 shifts
If you’ve used Instawork to work shifts as an independent contractor (i.e., 1099 shifts), Instawork did not deduct or withhold any taxes or other amounts from your earnings.
How you report your income on Instawork will depend on a few different factors. One of those is how much you earned, which you can find by tapping on the “Earnings” icon in the Instawork app.
Less than $400
If you earned less than $400 on Instawork, you may not owe taxes on that income. You should, however, report it under the “Other income” section on your 1040 form — the main form most people use to report their income and calculate their taxes.
$400+
If you earned more than $400, you’re likely subject to a federal self-employment tax. Besides your regular 1040, you’ll probably need to fill out the Schedule C and Schedule SE forms. These will allow you to calculate how much you owe in self-employment taxes.
What is Schedule C?
Schedule C is the form where you record your profits and/or losses over the tax year. In this form, you’ll provide basic details about you/your business, the income you earned from providing your services as an independent professional, and your business expenses.
Independent contractors may be eligible to deduct certain business-related expenses, including cell phone bills or car-related expenses. Reporting all of your eligible business expenses can make your tax refund bigger, or reduce the amount that you owe in taxes. You can learn more about which business expenses are deductible here.
At the end of the Schedule C form, you’ll subtract your expenses from your income to get your net profit or loss, which is the amount that you’ll pay taxes on.
What is Schedule SE?
The other form independent contractors have to fill out is Schedule SE. With this form, you’ll calculate how much you actually owe in self-employment taxes. Follow the instructions on the form or the advice of a tax professional when making these calculations. Generally, you’ll multiply any net profits you’ve earned (as calculated in your Schedule C) by the federal tax rate, and then multiply that amount by 50% (thanks to the self-employment tax deduction).
$600 - $999
If you have earned more than $600 working 1099 shifts on Instawork, you’ll also receive a 1099 tax form from Instawork that tells you how much you earned using Instawork over the year. So in addition to taking the steps above for people who earn $400+, you’ll submit it along with your completed tax forms. You’ll automatically get these through tax1099.com.
$1,000+
Most people think about tax season as a once-a-year event. But if you’re an individual who’s earned $1,000 or more from self-employed income, you may have to pay estimated quarterly taxes too. You can find details about how to calculate those payments here, and submit them here.
W-2 Shifts
If you’ve used Instawork to complete W-2 shifts (i.e., as an employee of Advantage Workforce Services, LLC), taxes and other required withholdings have already been deducted from your pay — so you won’t have to pay quarterly estimated taxes.
You’ll access your W-2 form through ADP, which will detail how much you earned and how much was withheld. You’ll use this information to fill out your 1040 form.
Keep in mind that if you’ve worked both 1099 and W-2 shifts using Instawork, you’ll need to report your 1099 earnings and W-2 earnings separately on their appropriate forms.
Tax software options
Instead of printing, filling out, and mailing your tax forms and payments, you can also use tax software that streamlines the process. Some of them are even free. Here are just a few of the many options:
There are also some organizations that provide free tax advice, or even tax filing services, for certain groups, like:
You can also try searching “free tax help” plus the name of your city to find a local organization.
Taxes can feel intimidating, but the good news is there are lots of resources to help you, from online guides to software programs to organizations. And if you have any questions about reporting your earnings on Instawork, you can always check out the Tax FAQs on our help site.
Happy filing!
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