As an independent contractor earning income through Pawsible, understanding your tax obligations is important for staying compliant and maximizing deductions. Here's what you need to know about taxes, 1099-K forms, and how to prepare your returns.
What is a 1099-K?
A 1099-K is a tax form issued by payment processors (in your case, Stripe) that reports payment transactions. It documents the gross amount you received through the Pawsible platform before any fees or refunds.
You'll receive a 1099-K when:
- You earn $5,000 or more in gross payments through Pawsible
- You complete 200+ transactions in a calendar year
If you don't hit these thresholds, you still owe taxes on all income earned. You just won't receive an automatic 1099-K from Stripe.
Do you have to file? Three examples
The important thing to notice is that you are responsible for reporting any amount of income on your own, regardless of whether you received a 1099-K. The 1099-K only tells you that Stripe also reported the income to the IRS. It does not decide whether you owe.
The number that actually decides whether you must file is the IRS $400 net self-employment earnings threshold. If your net earnings (income after business expenses) reach $400 in a calendar year, you're required to file a return and pay self-employment tax.
Here's how that plays out at three income levels:
Example 1: You earned $20
This is below the $400 self-employment threshold, so this income alone does not create a filing obligation, and you won't receive a 1099-K (you're also well below $5,000). If you're already filing a return for other reasons, such as a W-2 job, the $20 is still technically reportable income, but on its own it triggers nothing.
Example 2: You earned $500
No 1099-K arrives, because you're under the $5,000 reporting threshold. This is the case sitters most often get wrong. Even with no form in hand, you're over the $400 self-employment threshold, so you are required to file and pay self-employment tax on your net earnings. No form does not mean no taxes.
Example 3: You earned $5,002
You're over both thresholds. Stripe will send you a 1099-K (and a copy to the IRS), and you must file and pay self-employment tax on your net earnings. Use the 1099-K as a starting point, then subtract your deductible business expenses to get to the net income you're actually taxed on.
The pattern: the 1099-K ($5,000) is about paperwork, the $400 threshold is about whether you owe. You can easily owe taxes without ever receiving a form.
Where to find your 1099-K
Your 1099-K will be available directly in your personal Stripe account dashboard, not through Pawsible. You'll receive it by January 31st of the following year.
To access it:
- Log into your Stripe dashboard
- Go to Settings → Tax settings
- Download your 1099-K form
Stripe automatically sends a copy to both you and the IRS, so make sure your tax ID (SSN or EIN) is correct in your Stripe profile.
What gets reported on your 1099-K
Your 1099-K shows gross payments only, meaning the full amount before:
- Pawsible's platform fee
- Stripe processing fees
- Any refunds issued
This is important: your actual net income (what you keep) is lower than what appears on the 1099-K.
Filing your taxes
Calculate your net income
When you file your taxes, you'll need to calculate your net income, not the gross amount on your 1099-K:
Net Income = Gross Income (1099-K) - Business Expenses
Deductible business expenses
As an independent contractor, you can deduct legitimate business expenses. This lowers your taxable income and could save you significant money. Common deductions for pet sitters include:
- Pawsible platform fees (the percentage cut Pawsible takes)
- Stripe processing fees
- Mileage to and from client homes (currently ~67¢/mile, check the current IRS rate)
- Pet care supplies (wipes, towels, treats, toys, cleaning supplies)
- Pet first aid kit and supplies
- Phone/internet (business-use portion)
- Pet care certifications and training courses
- Insurance (pet care liability insurance)
- Vehicle maintenance (if using your car for business)
- Home office (if you use a dedicated space)
Pro tip: Keep receipts and maintain a mileage log throughout the year. This makes tax time much easier.
Self-employment tax
As an independent contractor, you also owe self-employment tax (~15.3%) on top of income tax. This covers Social Security and Medicare. You calculate this based on your net income.
Quarterly estimated taxes
If you expect to owe $1,000 or more in taxes, the IRS requires you to file quarterly estimated tax payments (Form 1040-ES). This prevents penalties and spreads payments throughout the year.
Quarterly due dates:
- Q1 (Jan–Mar): April 15
- Q2 (Apr–Jun): June 15
- Q3 (Jul–Sep): September 15
- Q4 (Oct–Dec): January 15 (of next year)
Tips for tax success
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Track income and expenses throughout the year. Don't wait until tax time. Use a simple spreadsheet or an app like Wave or QuickBooks Self-Employed.
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Keep all receipts. Save receipts for supplies, mileage logs, certifications, and insurance.
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Separate business and personal. If possible, use a dedicated credit card or bank account for business expenses. This makes record-keeping easier.
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Consult a tax professional. A CPA or tax pro can help you maximize deductions and handle quarterly payments correctly.
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Set aside savings. Consider setting aside 25–30% of your earnings for taxes. This way, you won't be caught off guard when the tax bill comes due.
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Know your state requirements. Some states have additional income tax or require reporting at lower thresholds than the federal $5,000.
Questions?
For questions about how Pawsible fees are calculated or your Stripe account, reach out to our support team at support@pawsible.io. For tax-specific questions, consult a tax professional or the IRS website.
Remember: This article provides general information and is not tax or legal advice. Every sitter's situation is unique. Consult a qualified tax professional for guidance specific to your circumstances.