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I have a standard office job and I am looking to Uber at the same time. I just recently started the office job and plan to start working as a driver in the next few days. I am curious how am I supposed to file my taxes, since one is a standard job and the other I work as an independent contractor? Do I fill out a W2 form yearly with the total income between both jobs, and then file quarterly 1099 forms?

I've never filed taxes before, so I just want to make sure I don't owe anything.

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You file taxes as usual.

W2 is a form given to you, you don't need to fill it. Similarly, 1099. Both report moneys paid to you by your employers. W2 is for actual employer (the one where you're on the payroll), 1099 is for contractors (where you invoice the entity you provide services to and get paid per contract).

You need to look at form 1040 and its instructions as to how exactly to fill it. That would be the annual tax return. It has various schedules (A, B, C, D, E, F, H, etc) which you should familiarize yourself with, and various additional forms that you attach to it. If you're self employed, you're expected to make quarterly estimate payments, but if you're a salaried employee you can instruct your employer to withhold the amounts you expect to owe for taxes from your salary, instead.

If you're using a tax preparation software (like TurboTax or TaxAct), it will "interview" you to get all the needed information and provide you with the forms filled accordingly. Alternatively you can pay someone to prepare the tax return for you.

  • So, is the 1040 the only form I need to fill out? Preferably, I would like to do my taxes myself so I could get some experience with it. – A4Treok Feb 21 '16 at 5:33
  • @A4Treok: You'll almost certainly want/need to file Schedule C, which lets you deduct business expenses from the amount you were paid on the 1099. There are a couple of additional forms for that to deduct business use of home and vehicle expenses, if those apply. And you'll need to file F1040sse to figure self-employment tax (what would be taken out for Social Security &c if you were an employee). – jamesqf Feb 21 '16 at 5:57
  • Thanks for the reply! From what I understand, I technically only need to fill out the 1099 and F104sse, and the Schedule C is for my benefit. Regardless, I'll look into those, but so far everyone has been very helpful. Thanks again. – A4Treok Feb 22 '16 at 8:19
  • @A4Treok 1099 is a form given to you, not a form you fill (for the money you earn, that is). You'll need to fill Schedules C and SE and attach them to your tax return (form 1040), most likely. – littleadv Feb 22 '16 at 8:23
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Welcome to the wonderful but oft confusing world of self-employment.

Your regular job will withhold income for you and give you a W2, which tells you and the government how much is withheld. At the end of the year uber will give you and the government a 1099-misc, which will tell you how much they paid you, but nothing will be withheld, which means you will owe the government some taxes.

When it comes to taxes, you will file a 1040 (the big one, not a 1040EZ nor 1040A). In addition you will file a schedule C (self-employed income), where you will report the gross paid to you, deduct your expenses, and come up with your profit, which will be taxable. That profit goes into a line in the 1040.

You need to file schedule SE. This says how much self-employment tax you will pay on your 1099 income, and it will be more than you expect. Self employment tax is SS/Medicare. There's a line for this on the 1040 as well. You can also deduct half of your self-employment tax on the 1040, there's a line for it.

Now, you can pay quarterly taxes on your 1099 income by filing 1040-ES. That avoids a penalty (which usually isn't that large) for not withholding enough. As an alternative, you can have your regular W2 job withhold extra. As long as you don't owe a bunch at tax time, you won't be a fined.

When you are self-employed your taxes aren't as simple. Sorry. You can either spend some time becoming an expert by studying the instructions for the 1040, pay for the expensive version of tax programs, or hire someone to do it for you.

Self-employed taxes are painful, but take advantage of the upsides as well. You can start a solo 401(k) or SEP IRA, for example. Make sure you are careful to deduct every relevant business expense and keep good records in case you get audited.

  • This is immensely helpful. Thank you so much. One thing I'm not entirely sure of, is the schedule C and schedule SE used only to calculate values that go on the 1099? Also, how do tell how much to withhold from my W2 job? That sounds like the easiest method. – A4Treok Feb 22 '16 at 8:16
  • @A4Treok: No, the 1099 is a form sent to you by the entity that paid you. It tells you the amount that you enter on line 1 (Gross receipts and sales) of Schedule C. Then after finishing Schedule C, you enter the amount from line 31 on Form 1040, line 12, and on Schedule SE, line 2. PS: Getting an accurate amount for increased withholding isn't simple, as it depends on accurately predicting your future 1099 income, your resulting tax bracket, deductions, &c. – jamesqf Feb 22 '16 at 18:51
  • Yeah, I've been reading up on the issue of predicting your income. Should I just put a hard percent away for taxes (like 15/30%)? – A4Treok Feb 24 '16 at 17:05
  • I'd suggest following the instructions for form 1040-ES if you have any doubts. It will tell you how much to set aside and when to send it in. Trying to set it aside through your office job or using other means is more complex and error prone. For sure set aside at least 15.3%, as self-employment tax alone (before regular income tax) is that much. Be sure to make estimated payments before Dec 31, not April 15. – farnsy Feb 24 '16 at 17:16
  • Nitpicks: SE tax is SS+Medicare(PartA/Adv), but not Medicaid which is funded from general revenue plus state match. Also the deadline for Q4 estimated payment is Jan. 15 (or next business day), although if you need to make state estimated payments (as you likely do if you have freelance income in a state with income tax) and you want to itemize state income tax you can only count the state payment in the filed year if it is made by Dec 31. – dave_thompson_085 Aug 11 '17 at 16:02

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