Intuit, the makers of TurboTax and QuickBooks, have been helping small businesses manage their finances, and taxes for more than twenty years. Who better to address some of your burning tax-time questions? However, keep in mind that this is general advice. Your specific tax situation may vary. When in doubt, consult with a qualified tax professional.Whether you’re a seasoned Fiverr Seller or just getting your business started, no one wants to pay more on their taxes than necessary. So we’ve gathered up six of the most common questions Fiverr Sellers have about taxes to help you reduce your tax liability and keep more of that hard-earned money in your pocket.
Maybe. It all depends on your net-earnings. To get that figure, you‘ll need to estimate the profits from your Fiverr sales. If you generated more than $400 profit, then you must report, and file a return for that income.
If your sales for the year were over $20K, or you had more than 200 transactions, the answer is yes. You should see a 1099 form in the Reports section of your PayPal account; however, even if you don’t meet the threshold requirements that result in a 1099 form, you’re still required to declare that income on your Schedule C and pay the associated taxes. PayPal must disclose these payments to the government so it’s important to pay your taxes to avoid being penalized.
Every time you complete a Gig on Fiverr, you should record the expenses incurred or needed for completing that Gig. This includes that monthly Adobe CC subscription or audio mixer used for laying down all those sweet tracks.
If you have a dedicated space in your home used only for completing your Gigs, you can take the Home Office Deduction, either a percentage of your home expenses (like rent and utilities) or simplified method ($ per square foot).
Regardless of whether you take the Home Office Deduction, you may still be eligible to deduct the business-use percentage of your total office supplies and equipment costs. This includes your laptop, office chair and desk associated with your business on Fiverr. Additionally, as long as it’s used for your business, you can claim a portion of your router and Internet service.
Investing in software or a tax-prepare is a great way to make sure you are capturing all of your deductions and not overpaying your taxes. Tools like QuickBooks Self-Employed help users save thousands on their taxes through quick and complete expense categorization. Regardless of which approach you take, the fees associated with tax preparation and tax-filing are deductible.For more answers to your tax questions, click here!