Tax season is upon us, and you may be wondering how to access your Instacart 1099 so that you can start filing taxes. Filing taxes as a contractor requires a lot of time, but it’s also very advantageous in the long run. Reaching your ideal tax scenario involves understanding every possible tax benefit available to you and also taking advantage of them.
Preparing your taxes as a contractor involves more than just adding up cost-basis numbers and writing them on Schedule C. It’s about optimizing your finances and making sure you get every deduction you deserve.
A W2 job doesn’t give you much opportunity to reduce your tax liability while also getting some nice benefits like an FSA or HSA account. The good news is that with the right information and preparation, you can enjoy this tax season rather than dread it! Let’s dive into how to access Instacart 1099 and start your tax season!
What is an Instacart 1099?
A 1099 is a form that reports income that is self-employed or contractor work. This means that if you were an Instacart shopper, you would receive a 1099 from your company at the end of the year. The same goes for other companies you may have worked for such as Uber, Lyft, DoorDash, Postmates, etc.
Why Should You Care About Your Instacart 1099?
The main reason you should care about your 1099 is because it determines how much you will pay in taxes. This is especially important if you are a contractor or freelancer and are self-employed. The amount of income on your 1099 determines your filing status, amount of tax you owe, and even what deductions you are eligible for. It also will determine your eligibility for certain tax credits like the Child Tax Credit or the Child and Dependent Care Credit.
How to Access Your Instacart 1099?
Sometimes it can take a few weeks for your 1099 to arrive in the mail, so you will want to start the process of accessing it early.
First, you will want to find your earnings from Instacart. You can do this by going to your earnings summary page. There, you will find the amount you earned and number of hours worked.
You can also find this information on your payment summary page. You can also request a copy of your earnings summary by contacting your account representative. You can expect a copy of your 1099 in mid-January or on the first business day of February. There will also be a 1099 summary showing how your earnings have been calculated.
Tip 1: Understand the Basics of Tax Deductions
The first thing you need to understand about tax deductions is that they are not the same as tax credits. Tax deductions lower your taxable income whereas tax credits reduce the amount of tax you owe. There are a few different categories of deductions:
- Investment-related expenses
- Healthcare-related expenses
- Travel and transportation expenses
- Miscellaneous expenses
These categories of deductions are important to remember when filing taxes as a contractor because many of them are easy to overlook. For example, investment expenses are deductions that can be overlooked: If you have been investing or contributing to your Individual Retirement Account (IRA), there is a good chance you will be eligible for a tax deduction!
Tip 2: Don’t Forget About Cafeteria, FSAs and HSAs
Contractor taxes are advantageous to W2 employees in many situations, but there are a few areas where W2 taxpayers have the upper hand. One of those areas is in regards to health care and health savings accounts. Contractors do not qualify for a health care deduction, but W2 employees are able to deduct their health care premiums. This may not seem like a big deal, but it can add up quickly.
Health care premiums vary from person to person and depend on the insurance provider and type of coverage. Health savings accounts are another type of account that requires a bit more explanation. This is a special account for holding and investing in medical expenses. For every dollar put into the account, you get a tax deduction on the amount, which is advantageous when it comes to filing taxes as a contractor. There are also certain circumstances in which you are allowed to deduct the amount you have invested in your HSA.
Tip 3: Don’t Forget to Deduct Travel and Advertising Costs
Travel and advertising expenses are often overlooked by contractors and they can be very beneficial when filing taxes. For example, if you drove your car to pick up groceries as an Instacart shopper or DoorDash driver or used your own car to deliver food or do deliveries for Uber, you can deduct the mileage on your taxes.
You are allowed to deduct 50 cents per mile in 2019. For example, if you drove 10,000 miles during the year, you can deduct $5,000. Advertising costs are another area in which contractors can benefit. For example, if you put advertisements in local newspapers or magazines, you can deduct those expenses. If you put up posters or flyers, you can deduct those expenses as well.
Tip 4: Always Track Mileage on Taxes and Stay Organized!
All of these tips are great, but the one thing that is most important is being organized. Being organized and tracking all of your expenses is critical when it comes to filing taxes as a contractor. Make sure you have all of the receipts for your car, gas, and travel, and all of the receipts for advertising. Take pictures of everything, and keep all of the receipts in one place so that you have them when you are ready to file.
There are several apps and tools that can help you organize your receipts. Be sure to keep everything organized, and you will make the process much smoother and easier when you are ready to file your taxes! The best way to guarantee you get everything you deserve is to take the time to prepare. Remember, it’s not the end of the world if you don’t get a big refund or even get a huge tax break. It’s the end of the year, and it just means you had a good year.