We know filing taxes can be tricky, especially for independent contractors. That’s why we’ve answered Runners’ most pressing tax questions to help you navigate the process and file your return like a pro.
As an independent contractor, you are responsible for keeping track of your earnings and accurately reporting them in tax filings. Runner earnings can be found in the Runner app. If you have any questions about what to report on your taxes, you should consult with a tax professional. Favor cannot provide you with tax advice nor can we verify the accuracy of any publicly available tax guidance online. You should always report earnings according to tax laws and consult your own tax advisors.
Keep in mind: Favor does not automatically withhold taxes. We calculate the subtotal of your earnings based on the date the earnings were deposited, not on the date you completed the order.
Frequently asked questions
Are there any tax filing changes this year?
Yes. Previously, the IRS threshold for Form 1099-K eligibility was $20,000 AND 200 transactions. It is now $5,000 with no specified number of transactions.
Similar to previous years, we will only be reporting your gross earnings in Box 1A. This includes your earnings and any reimbursements, if applicable. Unlike previous years, it will not include the cost of goods or other unrelated items, such as delivery fees or cost of items purchased.
What is the difference between an independent contractor and employee?
One of the key differences between an employee and an independent contractor is that taxes are withheld for one and not the other.
As a Runner, you have an independent contractor relationship with Favor. You are not an employee and do not have taxes withheld from your earnings. In other words, you are responsible for tracking your own gross earnings and expenses for tax purposes.
Which tax forms will I receive?
As an independent contractor, you may receive Form 1099-K instead of Form W-2, which you may be used to getting as an employee of another company. We do not send out Form W-2s or 1099-NECs to Runners.
Runners who generated at least $5,000 in gross payments during the tax year will receive a Form 1099-K. If you do not meet this requirement, you will not receive a Form 1099-K.
What is a Form 1099-K?
Form 1099-K is an official Internal Revenue Service (IRS) tax document that includes a breakdown of your annual gross earnings as an independent contractor with a company.
Who qualifies to receive a Form 1099-K?
Only Runners who generated at least $5,000 in gross payments will receive a Form 1099-K. If you do not meet this requirement, you will not receive a Form 1099-K.
When will I receive my Form 1099-K if I qualify for one?
Favor will email Runners in late January to let them know their 1099-K status. If you do not receive an email by mid-February, please contact Runner Support. The physical copy of Form 1099-K will be sent to the address on file with Favor, and we encourage you to double-check that the address in your profile is up to date. Please note, the physical copy may not arrive for two to four weeks after January 31.
Understanding your 1099-K
- You will be mailed a Form 1099-K from our payment processor, Stripe, via a service called Payable.
- The dollar amount in Box 1A will include all the payments you received from Stripe via Payable. We will only be reporting your gross earnings in Box 1A. This includes your earnings and any reimbursements, if applicable. It will not include the cost of goods or other unrelated items, such as delivery fees or cost of items purchased.
- If you qualify to receive a 1099-K, you should receive your Form 1099-K in mid-February. If you do not receive it, please reach out to Runner Support for assistance.
How do I update the personal information being used on my Form 1099-K?
Once your Form 1099-K has been issued, that information has also been provided to the IRS for the current tax year. If the information on your Form 1099-K is incorrect (such as employer identification number, social security number, or names), please contact Runner Support.
More information regarding 1099-Ks and related calculations and information can be found here in The Rundown Blog
Do I still need to file taxes if I don’t qualify for Form 1099-K?
You are required to file taxes even if you did not receive Form 1099-K. Favor provides a summary of your yearly gross earnings in the Earnings section of the Runner app. You can use this information to calculate your total earnings for the previous year and determine your tax liability with your tax preparer or advisor.
When do I need to file my tax return?
For the 2023 tax year, the deadline to file federal and state tax returns or an extension with the IRS and applicable states is April 15, 2024. Check IRS.gov for the latest information.
Writing off expenses
We highly recommend speaking with a licensed tax professional to see which business expenses you can claim as either full or partial deductions from your earnings. These may include:
- Vehicle costs such as depreciation, lease payments, gas, tune-ups, registration, car washes, and new tires
- Mileage
- Car insurance
- Home-office-related expenses such as utilities, rent, and home security
- Runner gear such as shirts and insulated delivery bags
- Tolls or parking fees
- Your phone and phone plan
- Treats for customers like water, candy, and cards
- Accounting and bank expenses
Do I owe quarterly taxes?
If you anticipate owing taxes at the end of the year, you may need to make quarterly tax payments. Tools like the H&R Block Income Tax Calculator can help you determine if you might owe taxes. However, we recommend speaking with a licensed tax professional to be sure.
Can you provide documentation for proof of income?
As an independent contractor providing services for Favor, we can only confirm your active Runner status and activation date. You can view your earnings information, including total earnings by month and year, in the Runner app. This information, along with your bank records, should suffice for any applications requiring proof of income (such as loan or housing applications). As an independent contractor, you should also be listed as the point of contact on any applications since you are considered self-employed.
Favor has partnered with Stride!
We’ve partnered with Stride, a company that helps you save time and money on insurance and taxes, to bring you the following resources:
- Free expense and mileage tracking app with deduction suggestions
- Access to free tax guides, articles, and webinars
- Simple, integrated tax-filing services with H&R Block (with a discount!)
Download the Stride app to get started!
Favor is not offering tax advice or responsible for the information provided by any third party, including Stride. Please see your own tax advisers.