Are you driving for Uber or Lyft on the side? Do you issue invoices for your talents and expertise instead of collecting a traditional paycheck?
If the answer is yes, congratulations. You're participating in the gig economy.
And you're far from alone.
"One in every five Americans are joining [the self-employed ranks] every year," Debra Hammer, senior communications manager at Intuit, the makers of the TurboTax line of software, told Small Business Computing. By 2020, 60 million people in the U.S. are expected to supplement their paychecks with a side hustle, or in many cases, accept freelance and consulting gigs as their sole source of income.
It can be a great way to earn a living, one that allows folks to cash in on their various talents and enjoy flexible work hours. The downside is that calculating taxes is a little more complicated for those accustomed to getting a wage and tax statement form, or W-2 as it's commonly referred to, from their employers.
In fact, for many new freelancers, their workloads may be so similar to those of traditional, paycheck-earning employees that it can be tough to come to grips with the change in tax-filing status. "You don't necessarily consider yourself self-employed. You don't necessarily know what those tax implications are," Hammer said.
Enter Intuit. The company recently released a new TurboTax offering that not only takes the mystery out of self-employed taxes, but can also help hard-working folks keep more of their money.
On the Hunt for Expenses
One of the principles that guided the development of the new TurboTax Self Employed solution "is the acknowledgment that people have multiple sources of income," said Karla Uribe, senior product manager at Intuit. When workers clock out of one job to start another, accurately keeping track of expenses often gets lost in the shuffle.
"One-third of people who are self-employed don't take business expenses," lamented Hammer.
The software's ExpenseFinder feature makes that a thing of the past. It scours bank and credit card accounts – with permission, of course -- unearthing and recommending transactions that can be used as deductions. Further taking the guesswork out of self-employed taxes, ExpenseFinder automatically sorts those deductions into IRS-approved categories.
According to Hammer, those deductions can add up to some very substantial amounts. On average, users can rack up $4,300 in savings.
Users that also receive a W-2 form needn't worry. TurboTax Self Employed works seamlessly in mixed tax status situations.
Live Tax Help
Everyone faces uncertainty or gets stuck while preparing their taxes. Another feature, called SmartLook, can not only put users in touch with TurboTax experts when they have questions about navigating the software, but also certified public accountants (CPAs) or Enrolled Agents who can offer personalized answers to their tax questions in real-time.
SmartLook establishes one-way video connection (it won't hijack a user's camera), showing agents as they help users make sense of their taxes. Users' screens are displayed on the agents' side, allowing them to highlight sections of the screen and make annotations that clear the path forward to a successful self-employed tax filing.
No time now? Users can also schedule an appointment at a time that works best for them. In keeping with TurboTax's goal of helping self-employed workers keep more of the money they earn, SmartLook is included at no cost.
Customers who file a return using TurboTax Self-Employed also get QuickBooks Self-Employed, from Intuit too, at no extra cost. The web-based service, which goes for $10 per month, features a mileage tracker, a receipt capture tool and an expense tracker that can help users cut their tax bills by up to 36 percent.
TurboTax Self Employed is available now, just in time for the 2017 tax season. Prices start at $89.99 (federal filing, state additional).