We get a lot of questions about driving Uber or Lyft. So much so, that we created a video with the Q&A’s.
Jan was really upset because when he went to file his taxes this year, he found out he owed money. He didn’t understand why. Well, when you’re an independent contractor, it may feel as if you’re making more money, but welcome to the wonderful world of business… it’s not always the case. You have to weigh the pros and cons of owning your services and the very first thing is knowing how to navigate Taxes.
Personally, owing for the first time in my life was so jarring. I couldn’t believe how much I had not prepared. I believe the first tax liability assessment I received was for $10k. I couldn’t believe it and I wasn’t prepared. Imagine suddenly owing that much and realizing that you never planned on not having those funds!
So one of the things you have to realize when you begin to make money on offering services or products that are bringing you income is to set aside money for taxes. One person I know has a separate account where 20% of whatever she earns goes into the account to cover potential tax liabilities at the end of the year. If there is money left over, she invests it into her retirement account.
Plan for taxes because there are two things certain in life… But also rest assured that the refund is just your own money back. When you sit down with a Financial Advisor and Tax Professional to learn more about what to do, you can find the best plan of action in order to ensure your debts owed to the government are paid with no surprises.