Disclaimer: Gridwise is not a personal tax advisor. The information below is meant only for guidance purposes and not as professional, legal, or tax advice.
As the dust settles on the new year, it’s time to start carrying out your resolutions. One essential resolution for any driver serious about their rideshare earnings is getting a better understanding of your tax liabilities as a 1099 worker. This can help you start your business off right in 2022.
You’re probably wondering, How do I file 1099 taxes in 2022?
Gridwise is here to provide you with the latest on changes to 1099 taxes in 2022.
- What is the standard mileage deduction in 2022?
- What are the quarterly tax dates for 2022?
- What’s a 1099-K form, and how is it used?
Tax season is complicated enough, so we’ll keep this simple.
Standard Mileage Deduction for 2022
It’s no overstatement that 2021 wasn’t the easiest year for rideshare and delivery drivers. Fluctuating demand and fuel costs made earnings difficult to predict.
Thankfully, there’s some good news for 2022. Beginning January 1, drivers can deduct 58.5 cents per mile driven from their taxes.
That’s a 2.5 cent increase from the 56 cents standard mileage deduction for 2021. Those cents certainly add up – which is why it’s essential to track every one.
Gridwise is the easiest way to track all your expenses, including mileage, to keep more of your earnings at tax time.
Quarterly Tax Due Dates for 2022
As an independent contractor, you are required to file quarterly taxes to the IRS. Instead of wondering, “Do I file taxes as an Uber driver?” (or wondering when to pay) take note of the 2022 quarterly tax dates.
- For income earned January 1 – March 31, 2022: estimated taxes are due April 15, 2022
- For income earned April 1 – May 31, 2022: estimated taxes are due July 15, 2022
- For income earned June 1 – August 21, 2022: estimated taxes are due September 15, 2022
- For income earned September 1 – December 31, 2022: estimated taxes are due January 15, 2023
The simplest way to track your mileage and expenses as a rideshare driver and get the highest deductible — that’s more money you can keep — is to download the Gridwise app.
Just link your rideshare or delivery account in the app and go “on shift” when you’re ready to drive. Gridwise takes care of the rest by automatically tracking miles driven and creating easy-to-understand reports that are sure to make you feel like a tax whiz.
The BIG Change: Form 1099-K
Tracking your expenses as a rideshare or delivery driver is always a smart move – for 2022, it’s critical.
That’s because the IRS is changing the rules for individuals who receive payment through online venues.
Previously, only individuals who earned more than $20,000 or processed more than 200 transactions in a calendar year were required to file a 1099-K.
For 2022, the IRS lowered the de minimis threshold, requiring that all third-party settlement organizations (TPSO) furnish a 1099-K to any payee who receives more than $600.
So what does that really mean?
For 1099-K purposes, gig drivers are considered payees. Every gig driver is now almost guaranteed to receive a 1099-K form in 2023.
Crucially, the 1099-K form only shows revenue earned. It’s up to you as the driver to accurately track and report your expenses so you don’t end up overpaying on your taxes and losing part of your earnings.
Do Gig Drivers Still Need to Fill Out the 1099-NEC or 1099-MISC in 2022?
Yes. As a gig driver, you’ll still need to file a 1099-NEC or 1099-MISC for the 2022 tax year. Form 1099-K covers TPSO payments (think PayPal or Venmo), while the others cover payments received via direct deposit or check.
The best way to stay on top of these changes and be prepared for this new year (new you!) is to choose the right partners.
One fantastic partner is Lili, a banking app designed specifically for freelancers, where they can keep their personal and business dollars separate but in the same place. They’re also on a mission to help independent workers make sure they only pay the taxes they owe, delivering some pretty useful tools to any 1099-ers out there.
Wondering if you’ve saved enough for your self-employment taxes? Lili makes it easy by automatically setting aside money with each paycheck!
Worried you’re going to forget tax write-offs or misplace a receipt? Lili lets you categorize your expenses and scan receipts in real-time, and generate business expense report every quarter.
They can even pre-fill your Schedule C at the end of the year.
Plus, you’ll have access to:
- A Checking account with no minimum deposit and a Business Visa
- Cashback rewards (incl. at Chevron and Autozone)
- Fee-Free Overdraft up to $200
- And more