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.
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.
If you earned less than $400 in a tax year as self-employment, you may not owe taxes on that income. According to IRS guidance, income under $400 may fall under "Other income" on your 1040 form—check the IRS instructions or a tax professional to confirm the correct category for your situation.
If your net earning from self-employment are $400 or more, 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. If you're in the Buffalo or Rochester area, you can also explore our Buffalo / Rochester Catering Temporary Staffing Services for additional opportunities.
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 or 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, such as cell phone bills or vehicle costs used for work purposes, may be deductible if they meet IRS criteria. Reporting all of your eligible business expenses may reduce your taxable income or overall tax owed, depending on eligibility.
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.
The other form that independent contractors may 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, and the advice of a tax professional when making these calculations.
If you earned more than $600 working 1099 shifts on Instawork, you may also receive a 1099 tax form from Instawork that tells you how much you earned using Instawork over the year. In addition to taking the steps above for people who earn $400+, you'll submit it along with your completed tax forms. You should automatically get these through tax1099.com.
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-employment income, you may have to pay estimated quarterly taxes too. You can find details about how to calculate those payments here.
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.
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:
Disclaimer: This content is for general informational purposes only and should not be relied upon as tax, legal, or financial advice. Tax laws may change and vary by jurisdiction. Please consult a qualified tax professional or the IRS for advice regarding your specific situation. Reporting requirements for gig platforms may evolve (e.g., changes to 1099-K thresholds). Check IRS.gov for current rules.
