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These gig workers are uneducated, entitled, and low knowledge. As a full time independent contractor I enjoy all my business expense deductions and I get to keep more money than employees do.
How do you when accounting for benefits lost (healthcare, dental, eye care...)?
Why would you expect uneducated, entitled and low knowledge people to do the smart thing?
To me a gig job where you are required to run your vehicle into the ground is a bad idea.
They have to deal with traffic tickets, accidents, robberies, added possibilities of blown engines and transmissions and low resale value due to high mileage.
And all the chatter that you don't much money being a gig driver. Someone without skills can go to Target and make $20 per hour. Lots of better paying jobs now where you don't put a ton of miles on your personal vehicle.
Yes they can write off their mileage. Not sure that in any way equals all the potential problems.
The problem is that our government wants to wholesale include all freelance workers in a single bill that covers all. This would spell the end of many contract work if it requires extra documentation on both the hiring company and contractor to have "employee" like arrangements.
Companies don't want it because it hurts their balance sheet to add more W2 workers. Contractors don't want it because W2 salary includes predrawn taxes and doesn't allow them to deduct their expenses and efforts.
It means that the hiring company must provide the tools and expense the employee directly for their employment.
If an Uber driver uses their own car, the entire car payment and insurance, maintenance, and even % of fuel costs are tax deductible. Including traffic tickets.
As an employee, the hiring company must pay you or provide the employee with a car or take care of their car's expenses. This is all useless documentation.
The bottomline is that as a contractor your gross income is adjustable based on your net income without taxes and you pay taxes after your gross.
As an employee you would have to depend on the employer to define your work and your vehicle shall be compensated by the employer for all expenses. This is a nightmare situation for all parties.
The main reason people who desire to be employee because they live in a high cost area and they are forced to drive a lot to make ends meet and they can't keep up with inflation. But as an employee they will find out, they will be forced to drive atleast 40 hours a week like most people.
Quote:
Originally Posted by blazerj
How do you when accounting for benefits lost (healthcare, dental, eye care...)?
If you are a freelance contractor all your healthcare costs including incidents are tax deductible against your income. This is not different than your employer who does this for you.
Quote:
Originally Posted by whateverblahblahblah
So what you're basically saying is that you haven't been profitable since you haven't had to pay income tax? If you were profitable, you would have had to pay income tax. The IRS mileage rate includes costs like depreciation on the vehicle, gas, insurance, and maintenance costs. It isn't some generous gift that the IRS provides to drivers.
What a crappy gig.
The problem is there is a IRS threshold, when you make under $20k on a 1099-MISC statement that you don't have to report income tax. So majority of gig workers that work part time never receives a 1099-MISC report. So they have no idea that being an EMPLOYEE, the employer is REQUIRED to send you a W2 and whether or not they deduct taxes for you is up to them.
These people will realize that becoming a W2 worker they will be forced to file taxes or have taxes taken out of their paychecks right away.
A few years ago,I watched on Youtube several gig drivers posted their results,Chicago and CA ,and they made slightly above minimum wage after taking into consideration all the overhead,no overtime pay.
Recently one driver 63 years old joined the union rally in CA said he has been driving for years and average $500/week and worked 10-13 hours 6 days a week.
I think we are seeing some kind of revolution since COV19,physical labor is worth more ,how would you like to be designing a new gadget or engage in financial engineering when no one comes to pickup garbage,fix your toilet??
The reason why so many retailers can't find workers because they pay workers W2 and when in comparison a gig worker makes more because no taxes taken out of their pay. They will find out the hard way when Uber drivers become W2 and they will see their paychecks get cut in 1/2 by taxes and it will be too late to undo the law.
The only way to get Uber to pay more is to unionize together and force Uber to payout more. But too many drivers would not agree because many Uber drivers I've met are extremely profitable and those are the smart ones that knows being a 100% fully independent contractor is the way to go.
If you are a freelance contractor all your healthcare costs including incidents are tax deductible against your income. This is not different than your employer who does this for you.
The problem is there is a IRS threshold, when you make under $20k on a 1099-MISC statement that you don't have to report income tax. So majority of gig workers that work part time never receives a 1099-MISC report. So they have no idea that being an EMPLOYEE, the employer is REQUIRED to send you a W2 and whether or not they deduct taxes for you is up to them.
These people will realize that becoming a W2 worker they will be forced to file taxes or have taxes taken out of their paychecks right away.
Only your health insurance costs are deductible if you are self employed. Any other medical costs are only deductible to the extent they exceed 7.5% of AGI
The $20k threshold for a 1099-MISC is for the 1099 only. You are still required to report the income on your personal tax filings. And, the 1099-MISC does not apply to independent contractors. There is a 1099-NEC form for that with a $600 threshold. When the 1099-MISC applied to independent contractors, there was a $600 threshold, not $20k.
Independent contractors are required to report ALL of their income on their tax filings, regardless of whether they received a 1099.
The reason why so many retailers can't find workers because they pay workers W2 and when in comparison a gig worker makes more because no taxes taken out of their pay. They will find out the hard way when Uber drivers become W2 and they will see their paychecks get cut in 1/2 by taxes and it will be too late to undo the law.
The only way to get Uber to pay more is to unionize together and force Uber to payout more. But too many drivers would not agree because many Uber drivers I've met are extremely profitable and those are the smart ones that knows being a 100% fully independent contractor is the way to go.
Retailers are required to use employees, because there is no way they can meet the requirements to call them independent contractors.
Gig workers don't have taxes withheld, but they still owe the taxes, just like a W-2 employee. Being a gig worker does not magically make you exempt from taxes.
Only your health insurance costs are deductible if you are self employed. Any other medical costs are only deductible to the extent they exceed 7.5% of AGI
The $20k threshold for a 1099-MISC is for the 1099 only. You are still required to report the income on your personal tax filings. And, the 1099-MISC does not apply to independent contractors. There is a 1099-NEC form for that with a $600 threshold. When the 1099-MISC applied to independent contractors, there was a $600 threshold, not $20k.
Independent contractors are required to report ALL of their income on their tax filings, regardless of whether they received a 1099.
That's the official requirements but you and I know that majority of people who don't receive a 1099 isn't going to report income tax and many don't know they have to report regardless.
I'm simply stating the reality is that many of these gig workers doing Door Dash or Lyft don't know what they're getting into demanding to be a W2 employee.
They could be doing this part time making $2000 a month suddenly getting less than that on W2 and requirements by the operator they must perform a minimum set hour of less than 25hrs a week otherwise don't qualify for subsidized benefits.
These are all work policies these people have no idea what it's like being an employee vs being independent.
Basically all these gig workers that does some gig like delivery or driving want to be reclassified as employees instead of independent contractors shows they don’t know anything about finance and business.
If they are reclassified as employees they will lose all of the benefits of being an independent contractor such as the ability to deduct their car payments as work expense. Car repairs are no longer qualified deductions. You lose a ton of pre-tax expenses.
As an employee you automatically lose the ability to deduct your business expenses. These idiots are probably not filing any taxes due to the 1099 - $20k threshold.
As an employee they will have to send you a W2 and you must file taxes and you will lose more money for just some benefits such as health care and paid vacation.
As a 1099 contractor you can deduct all your healthcare expenses against income before tax.
It goes to show, all the misinformed gig workers forcing companies to take you in as an employee and they will end up regretting it big time. They will lose the ability to set your own hours, since employers can define your work place and hours.
Employers have more control over employees. This is such as stupid move.
These gig workers are uneducated, entitled, and low knowledge. As a full time independent contractor I enjoy all my business expense deductions and I get to keep more money than employees do.
Tell us you've never been a contract worker without telling us you've never been a contract worker...
ETA: Looks like you are a contract worker who doesn't understand that you're paying extra taxes because your employer isn't subsidizing them. I was an IC for years... I gladly took a pay cut and went back to a W-2 job because I net more money that way. Vacations are paid, health insurance is paid, I pay less in taxes (you pay your share and what would be your employer's share of some of those taxes when you're an IC). Uber/Lyft is sort of a scam anyway and the drivers net very little, but it has little to do with them being contractors and everything to do with the rideshare business model.
All that being said, yes, there are perks to the IC lifestyle in terms of choosing your hours. Pick your poison, though. It's an adjustment to get used to a full-time job if you've been used to gigs; that's life.
The threshold for not paying taxes has been $600 per year for decades. Not sure where you're getting $20K from. Unless you're talking about PayPal, which is completely irrelevant. You still have to pay taxes even if you don't receive a 1099-K (or whatever they're calling it now).
Tell us you've never been a contract worker without telling us you've never been a contract worker...
ETA: Looks like you are a contract worker who doesn't understand that you're paying extra taxes because your employer isn't subsidizing them. I was an IC for years... I gladly took a pay cut and went back to a W-2 job because I net more money that way. Vacations are paid, health insurance is paid, I pay less in taxes (you pay your share and what would be your employer's share of some of those taxes when you're an IC). Uber/Lyft is sort of a scam anyway and the drivers net very little, but it has little to do with them being contractors and everything to do with the rideshare business model.
All that being said, yes, there are perks to the IC lifestyle in terms of choosing your hours. Pick your poison, though. It's an adjustment to get used to a full-time job if you've been used to gigs; that's life.
The threshold for not paying taxes has been $600 per year for decades. Not sure where you're getting $20K from. Unless you're talking about PayPal, which is completely irrelevant. You still have to pay taxes even if you don't receive a 1099-K (or whatever they're calling it now).
I agree and disagree with you because you left IC because you found a better paying W2 job. It's not apples vs apples.
Say you were making $15/hr on 1099 vs $15/hr on W2. Why would I take the $15/hr on W2? The taxes with held by the state would cut the gross pay. On 1099, I can deduct my travel expenses, my own equipment, and I can expense my car. On W2, you will get paid vacations but not everybody wants to take vacations. If you take 2 weeks of vacation fully paid, if I worked those days I can make a lot more than the fixed 2 weeks of salary.
With salary you're not entitled to over-time pay unless you are non-exempt in certain states.
I can't see why Uber or Doordash can pay drivers a competitive salary to drive for them and be profitable so they would have to pay workers a low rate or force employees to work extra hours.
They will regret just like how Amazon Warehouse workers are being treated.
I agree and disagree with you because you left IC because you found a better paying W2 job. It's not apples vs apples.
Say you were making $15/hr on 1099 vs $15/hr on W2. Why would I take the $15/hr on W2? The taxes with held by the state would cut the gross pay. On 1099, I can deduct my travel expenses, my own equipment, and I can expense my car. On W2, you will get paid vacations but not everybody wants to take vacations. If you take 2 weeks of vacation fully paid, if I worked those days I can make a lot more than the fixed 2 weeks of salary.
With salary you're not entitled to over-time pay unless you are non-exempt in certain states.
I can't see why Uber or Doordash can pay drivers a competitive salary to drive for them and be profitable so they would have to pay workers a low rate or force employees to work extra hours.
They will regret just like how Amazon Warehouse workers are being treated.
The withheld taxes DO NOT reduce the gross pay. And, the IC still owes taxes on the amount paid.
As a W-2 employee, the employer pays for travel expenses, if any, and commuting is not an expense.
If you make $15/hour, you are entitled to overtime under Federal law.
If I were to do my job as a contractor, I would have to make enough to cover:
Employer share of FICA/Medicare, or 7.65%
Employer subsidy on health insurance, which is $1100 per month, I pay $500
Paid vacation, I get 6 weeks
Short term paid disability. I can be off sick for 6 months and I still get paid.
If they are doing it right, their mileage deduction outweighs any earnings. I drove Uber for about 18 months to make ends meet where my "job" left off. Once COVID hit I quit because I was unable to sanitize my vehicle after each rider; not to mention the Friday and Saturday night drunks. It served a purpose for a short period. I don't believe I will ever go back to doing that.
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