New Report Finds 33% of 1099 Workers Do Not Have Enough Money to Pay Their 2020 Taxes
May 18, 2021
Do independent workers have enough to pay 2020 taxes?
Abound has released findings from their State of Taxes in the Independent Economy report.
The report surveyed 1,003 individuals in the U.S. who earn the majority of their income from independent work including freelance work, gig work, on-call work, or anything else considered to be 1099 income.
Commenting on the findings, Abound CEO, Trent Bigelow, said: "There are 68 million independent workers in the U.S., and that number is only going to increase in the years ahead. We must provide these workers with the financial infrastructure that W-2 employees have access to today. This is about building the future that independent workers want to work in."
Key Findings:
- 40% aren't setting aside income every month for their taxes. Independent workers are responsible for calculating and paying the taxes they owe, as taxes are not withheld from their paychecks — but almost half aren't setting aside the funds to do so.
- 42% say they don't pay their quarterly estimated tax payments. Independent workers should pay quarterly taxes in order to cover what they owe and avoid penalties. But many are not doing so because they're unaware they should, don't know the process, want to wait and file yearly, or just don't have enough set aside to pay it.
- 51% of independent workers worry about an IRS audit. Because the process of calculating and filing taxes is different for 1099 workers than it is for W-2 workers, they fear getting audited — possibly because they made a mistake, didn't have the right documents, or missed something else.
- 18% haven't started their 2020 tax filing — and don't expect to have it done by the deadline. Despite the deadline being pushed back to May 17, 18% of our respondents don't expect to meet the deadline. That translates into over 12 million independent workers failing to file on time.
- 33% won't be able to pay their taxes. One-third of respondents don't believe they'll be able to meet their tax obligations this year.
- 69% are concerned they'll owe more than they thought. They're worried that they made a calculation mistake somewhere that will result in them having to pay more than they anticipated or filed for.
To download a full copy of the report, please click HERE.
About Abound
Abound is on a mission to enable greater wealth and wellness for independent workers, resulting in increased retention, revenue, and compliance for those that serve them. Abound's developer-friendly API lets our partners easily embed benefits into their products, setting aside enough to cover taxes, healthcare, retirement, insurance, and more
To find out more about Abound, visit www.withabound.com.
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Original Source: New Report Finds 33% of 1099 Workers Do Not Have Enough Money to Pay Their 2020 Taxes
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