Apps from Uber and Airbnb to TaskRabbit and Instacart have jumpstarted the so-called “sharing economy” in the U.S., but they’re also created a whole lot of self-employed on-demand drivers, landlords and “rabbits” who are suddenly responsible for tracking their income and expenses and paying quarterly taxes.
[company]Stripe[/company], which handles the payment transactions for many of these new startups, and tax and accounting software giant [company]Intuit[/company] are hoping to ease that transition for all of these newly minted contractors by linking their respective technologies. Apps that use Stripe to collect their fees can now automatically categorize driving or errand-running income for its employees and populate that financial data into Intuit’s new QuickBooks Self-Employed software.
Us schlubs on the company payroll take the W-2 form for granted, said Alex Chriss, VP of Intuit’s self-employed finance products. We pay our taxes once a year, our employers generally cover our work-related expenses, and most if not all of our tax liability is deducted straight from our paychecks. As more workers transfer over to the on-demand economy, not only are they facing the foreign concept of tracking their own income and filing tax forms four times a year, they’re often dealing with some very complex reporting situations, Chriss said.
Take the driver that takes fares for multiple car services, or someone who drives in the evening for Lyft and shops on demand for Instacart during the day. Not only are they getting checks from multiple companies, they’re incurring expenses related to multiple jobs, Chriss said. By law, these companies can’t give their contractors any financial advice beyond “get an accountant,” he added.
Chriss cautioned that Intuit’s work with Stripe won’t magically solve your finances and pay your taxes, but he said the integration will make things much easier. The free version of QuickBooks Self-Employed will not only track your income, but also connect to your credit cards online allowing you to label any purchase a business or personal expense with a swipe of the finger.
The software also will help a contract worker get a better idea of what their actual take-home income is every day so you don’t wind up spending the tax collector’s share, Chriss said. While the basic software is free, Intuit will sell more advanced finance features, including TurboTax. Though Stripe has a large stable of collaborative consumption app customers, including Lyft, Shopify, TaskRabbit, Instacart and the newly landed Kickstarter, it didn’t say if they would all automatically support Intuit’s technology or if they have to elect to use the service individually.