I'm trying to start a non profit in my area. Advertising started slow, so I picked up another job doing delivery, using my vehicle. Well, of course, I haven't advertised since I started the other job, but I keep getting estimates and jobs since I started the delivery job. Terrible problem, right?! Well i posted this and couldn't get an answer. I'm gonna get an accountant when i file (I've always filed my taxes but this year will be a clusterfuck it seems). i need to know important things to stay on top of throughout the year.
On my delivery job i work off of tips. I get a higher wage while in the store. While on the road my pay drops below minimum wage, but we get a standard delivery fee for taking the deliveries, and tips. So I've got several questions, and really any guidance would be great. my end goal is to open a non profit, feed the homeless, reentry into society through work programs, transportation for the elderly/disabled and a few other things. i mean it was talked about when i started doing delivery, about management, and I'd do it 4-5 shifts/week, but i don't think they need help with management and my real drive is towards this non profit, and either way i need help with taxes. if this is the wrong sub, please let me know where to post it.
1) Is it legal for businesses to use tips as part of wages for w2 drivers using their own vehicles? they use tips as deductions, and it comes off my gross pay. It doesn't seem right, and it wasn't the law, but ik they've changed lots of laws in the last 10 years, so maybe this has changed too. I use half the money i make for gas. i need insurance, a running vehicle etc and a fund for when it breaks down. ik it's legal for servers, strippers, bartenders, etc; it just doesn't seem right for a driver who has daily expenses that are necessary to work. can this be wrote off? really, i was gonna change my taxes at that job to take more tax anyways to offset the income from the other job at the end of the year.
2) What are important things I need to do this year to prep for taxes? I've bounced this off of people and AI and get lots of different answers that I didn't think of, like different write offs (I'm still not sure of everything i can write off). IK sole propriotors pay 33% tax, but i currently don't have employees and I'm not making enough to create an LLC, although i may should do it for liability reasons. Any advice with SP vs LLC would be great.
3) I'm doing work, during the day, seperare from the delivery job, as a sole propriotor. IK I'm gonna get taxed heavy on it because I'm not paying taxes on that income now. I'm doing it to create a non profit (I've done the 1099 thing for the last 5 years. I'm still not great with the tax laws on it, but I've done it for work and with running online businesses, but never a non profit) so any help would be greatly appreciated. like i mentioned above, lists of important things i need to remember. Maybe monthly, quarterly, and yearly goals, important things to remember and general knowledge would be awesome!
LMK if more info is needed!
Posted by the_lurkmeister
2 Comments
1. Yes. Legit how almost every pizza shop pay their drivers anbd hasnt changed for years. Just like serveres they can pay below minimum wage if the tips make up the difference, if it doesnt the employer has to meet minimum wage. No a W-w worker you can not deduct any expenses. Including anything for the car.
2. SP or LLC for what? A Single Member LLC and SP are treated the same for tax purposes and reported directly on individual return. The Tax rate varies depending on income level.
a lot of people get overwhelmed the first year they have both W2 income and self employment income, so you’re definitely not alone there
biggest thing is separating the two mentally and financially as early as possible
for the delivery job:
if you’re a W2 employee, the rules are unfortunately very different than if you were an independent contractor. W2 employees generally can’t deduct mileage, gas, maintenance, insurance, etc. on federal returns the way 1099 drivers can
for the self employment side:
that’s where organization matters most. honestly the people who struggle the least at tax time are usually the ones who keep clean records all year, even if the business itself is still small
a few things that help a ton:
separate bank account for business income/expenses
track mileage consistently if applicable
save receipts digitally
set aside money for taxes every month
keep a simple spreadsheet or bookkeeping software updated monthly instead of trying to rebuild everything in april
also don’t rush into forming an LLC just because people online say you need one immediately. for taxes, a single member LLC is usually treated the same as a sole proprietorship unless you elect something different later. a lot of new businesses start as sole props first and clean up systems before worrying about entity structure
and for the nonprofit goal:
starting the actual nonprofit entity is a separate process from just “doing good work” under self employment. definitely worth talking to a CPA or attorney before mixing nonprofit activity with personal business income so you keep things clean from the beginning
you’re asking the right questions early which already puts you ahead of a lot of people