Many, many Americans have side hustles and work in their spare time. It’s estimated that a full third of the American workforce does at least some freelance work, and at least half of those have those as a full-time job. Even the voice of AOL works for Uber now. That’s created a tax nightmare many need to solve, and finally, TurboTax has something for those of us with a side job.
If you’re one of those lucky side-hustle-free types, a quick explanation: As far as the IRS is concerned, your Uber driver, your Instacart delivery guy, and (many of) your Uproxx writers are one-man corporations. They get paid a flat fee for their work, with nothing deducted from it. If you look at your paycheck, you’ll notice deductions for things like FICA and Social Security. You pay that weekly all year, but freelancers have to pay it all at once, either quarterly or at the end of the year, with the dreaded Self-Employed, or SE, Tax. Go ahead, sit down with a calculator and figure out how much you pay for the year. Now imagine owing that out of nowhere.
The only way to navigate this was basically to hire a tax accountant, which isn’t easy or cheap, especially if you have no idea what a Form SE is until you get handed one at the library. Literally, this form requires you to bust out the tape measure to figure out how much of your house is an “office” to get a deduction. TurboTax has finally solved those woes with a product aimed at the self-employed. It’ll walk people through both the deductions you can take as a self-employed person, and how it affects your overall tax return, which can be annoyingly complicated as well since your self-employment tax is also technically a tax deduction. Yes, the tax code is complicated.
This is great news both in the sense that you’ll have a happier Uber driver and in the sense that people who are stuck working gigs while hunting for full-time work won’t have yet another expense to deal with. Of course, it will also hasten the day when every human is also a corporation under the law, and possibly a world where we are ruled by vast megacorporations. But hey, at least we won’t have to deal with the IRS!
(Via Mashable)