Gig economy taxes present different challenges and opportunities, including tax reform changes
Last year taxpayers, including the self-employed, were told everyone would be impacted by tax reform in 2018. Now taxpayers are filing those returns and H&R Block is helping them understand what that means for them. For self-employed filers this can mean additional questions about the qualified business income deduction and if the individual tax benefits they claimed in years past are still available to them. To file an accurate tax return, H&R Block encourages self-employed taxpayers to make sure they have all the necessary tax documents and select a tax preparation method that best fits their needs.
“The complexity of taxes is often made even more complicated when the taxpayer is self-employed or has a side job. But that doesn’t mean these filers can’t take advantage of the savings and convenience of DIY tax prep,” said Heather Watts, senior vice president and general manager of digital at H&R Block. “With H&R Block online and software products, the interview process allows clients to simply answer questions about their financial situation and see how their choices and circumstances impact their tax outlook.”
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Make a personalized tax prep checklist
Making a personalized tax prep checklist is the best way to ensure the proper documents are on hand when starting tax prep, which can help the process go more smoothly.
“Not having the documents you need to prepare your tax return can be frustrating and can cause you to file an inaccurate return that might lead to under- or over-payment of your tax liabilities. Even when filing in the comfort of your own home, having the documents you need really can save you time, money and added stress,” Watts said.
In addition to documents needed about other aspects of their financial lives, self-employed taxpayers will need information that details these financial transactions, expenses and outcomes:
- All business income, whether reported on Forms 1099-MISC and 1099-K or not.
- Business/self-employed expenses – mileage, advertising, legal fees, employee wages, business insurance, office expenses, supplies, etc.
- Cash or accrual accounting method
- Inventory
- Net gains or losses
- Prior-year, unallowed passive activity losses
With this necessary information at hand, clients can be confident they receive every credit and deduction they deserve to ensure a maximum refund.
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Decide how to file – the clock is ticking
Filing by the April 15 deadline helps taxpayers avoid potential penalties and fines, as does using a product that meets individual taxpayer needs. H&R Block’s Self-Employed online product is designed specifically for taxpayers reporting self-employment and small business income, the Premium online product is best suited for freelancers, contractors and investors with simple earnings and expenses.
“Despite changes due to tax reform, selecting the right tax prep method depends on individual comfort level. H&R Block’s online tax preparation products are designed to help consumers feel confident whether they’re filing as a freelancer, small business owner or independent contractor. Plus, clients can get extra assistance by adding Ask a Tax Pro for unlimited chat and screen sharing with a tax pro or Tax Pro Review to have their tax return checked, signed and filed by a tax pro,” Watts said.
Additionally, H&R Block’s Self-Employed online product integrates with mobile expense tracking app Stride Tax, which automates mileage tracking and helps clients discover tax deductions unique to their profession. The integration allows Stride Tax customers to download their related business expenses directly into H&R Block Self-Employed and automatically categorizes them for the user. The Stride Tax app is in the Apple and Google Play stores.
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