How to manage your finances as an on-demand worker


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On-demand work is a rapidly growing alternative to the nine-to-five job. Companies such as Uber, AirBNB, and GrubHub are effectively reshaping the economy. With on-demand work, workers can set their own schedule, work a variety of jobs at the same time, and find specific work in their area of expertise.

According to an Intuit study, 63% of on-demand workers are using on-demand jobs to supplement their income. 46% of on-demand workers say that they take on-demand jobs in order to control their schedules. On-demand work is well within reach thanks to popular services like Uber and hiring networks like Moonlighting.

While on-demand work provides flexibility and freedom that a traditional nine-to-five job cannot always provide, on-demand workers are considered to be self-employed in the eyes of the IRS. This means that on-demand workers must track their business (on-demand work) finances separate from their personal finances and submit quarterly estimated tax payments to the IRS.

With some planning and financial know-how, you can learn how to manage and your finances and taxes as an on-demand worker. Here’s how to get started.

Tracking expenses

On-demand workers must remember to track all expenses related to their on-demand work to comply with tax rules. Expenses for on-demand work could include:

  • Utilities, internet and cable
  • Car or transportation costs
  • Supplies related to your gigs (tools, fuel, insurance)
  • Additional homeowner’s insurance (if you run your gig out of your home)

QuickBooks Self-Employed can help you keep track of expenses so that you’re ready at tax time. You can enter your expenses manually or take a photo of your receipts and QuickBooks Self-Employed will enter and categorize them for you. If your on-demand work involves driving, you can also use the built-in mileage tracker to keep track of your tax-deductible mileage.

Remember, it’s important to keep your business (on-demand work) expenses separate from your personal expenses for Uncle Sam.

Managing cash flow

Some types of on-demand work require that you submit invoices weekly or monthly in order to get paid. You will need to create, submit, and track your invoices so that you know how much money is coming into your account and whether you have enough money to cover your expenses. This is called cash flow management. Maintaining a positive cash flow means that you have enough money to cover your expenses and any purchases you may need to make. 

Paying estimated taxes

Everyone must report their income to the IRS each year, whether they are a full-time employee working in a company or an on-demand worker. Full-time nine-to-fivers typically receive a W-2 from their employers and use it to report their income when they file taxes. Alternatively, on-demand workers usually receive a 1099 from each client or service provider (i.e. Uber) they worked for that calendar year. The 1099 form reports the total amount paid to the on-demand worker that year.

When you work for a company full-time, the company is responsible for withholding taxes from your paycheck and delivering those tax payments to the IRS. Full-time employees don’t need to worry about sending tax payments to Uncle Sam throughout the year because their employer does it on their behalf. However, when you are an on-demand worker, you are responsible to calculate and send the IRS your tax payments. The IRS requires on-demand workers to send estimated tax payments every quarter and then to file taxes by April 15.

One way to calculate your quarterly estimated tax payments is to use last year’s tax return information. If you expect to make roughly the same amount of money this year that you made last year, you could take last year’s total tax bill and divide it by four to get to a quarterly tax estimate. You could also use the IRS’s Form 1040-ES to help guide you. 

Once you’ve calculated how much tax you owe each quarter, you can submit those estimated tax payments directly to the IRS via the EFTPS system. Remember to keep track of exactly how much money you’ve sent Uncle Sam throughout the year, as you will use this information when you file taxes.

With a bit of research and practice, you can learn how to manage your finances and taxes as an on-demand worker. 

This article was produced by the QuickBooks Resource Center and syndicated by

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