• Confessions of a Community College Dean

    In which a veteran of cultural studies seminars in the 1990s moves into academic administration and finds himself a married suburban father of two. Foucault, plus lawn care.

Title

An Underacknowledged Burden of the Gig Economy

Self-employment taxes for DoorDash?

May 17, 2021
 
 

The Boy is home for a couple of weeks, taking a break to reconnect with us and high school friends before his summer jobs start. As it happened, income taxes were due a few days after he got back, so he asked me to help him. We spent most of Saturday night working on his taxes.

I hadn’t appreciated just how ridiculous the paperwork burdens are for folks in the gig economy until he and I actually sat down at the kitchen table and gave the printer a good workout printing out all of those forms.

He had several small jobs last year. Two of them issued W-2s, so those were straightforward enough. But he also delivered for DoorDash. Or, as DoorDash would have it, he also contracted independently to deliver food through the facilitation of DoorDash. In other words, they didn’t withhold any taxes, and he has to fill out the self-employment forms.

For the amount of money we’re talking about, the paperwork is ridiculous. Luckily, he had used an app to track his mileage while he delivered, so at least he could deduct for that.

At first, given his income level, I had thought he could use a simple form, but the self-employment piece defeated that. Then I thought he might be able to use one of the online tax-prep platforms, but they charge almost $100 for forms involving self-employment. For the level of income he made, that’s silly.

A few years ago, I finally threw in the towel for my taxes and hired an accountant to do them. But reaching out to her on May 15 for a due date of May 17 didn’t seem reasonable. So we had to print out forms and try to decipher them the old-fashioned way.

For context: we’re native speakers of English, he’s blisteringly smart and I have a doctorate. I’ve been paying taxes for decades. We had a working laptop and printer and several hours to spend. And even with all of that, it was markedly difficult. As he put it, “Imagine if English were my second language!”

Exactly.

To the extent that students now are likelier to work jobs that are classified as “independent contracting” than traditional employment, more of them will be facing the paperwork burden of self-employment taxes. In some cases, that means tracking down “employers” who aren’t super-great about paperwork. It means documenting expenses in some sort of systematic way. It means dealing with an income-tax system that presumes that jobs come with W-2s. And then, after all that, it means the FAFSA. Just the thought of extending “prior prior” to include two-year-old DoorDash travel expenses on a financial aid application makes my head hurt.

The number of places that a well-meaning student could make a mistake, or simply throw up their hands and give up, has multiplied. In olden times, when most jobs came with W-2s, the process was relatively simple. In the ’90s, when I was in grad school, I used to fill out the one-page “EZ” form, which took maybe 20 minutes. At the time, I didn’t understand why people paid for tax preparation. I get it now.

The gig economy has plenty of other issues around it, of course. But requiring a level of paperwork meant for someone who owns a restaurant to apply to a delivery driver is nuts. And with all of that complexity comes more chance for error, more enforcement costs and more discouragement.

Thanks, TB, for showing me directly just how far gone our current system is. And a tip of the cap to all of the beleaguered financial aid folk out there, for whom this is old news. I knew it was bad, but I didn’t know it was this bad.

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