Squirrel
40% of All Workers in the U.S. will be Independent Contractors by 2020
That’s More than 60 Million People
There is an opportunity to provide independent contractors with educational materials that will empower them to understand and manage their 1099 tax status.
1099: Not All Bad?
1099 status can offer flexibility that W-2s don’t, depending on your financial goals, age, expenses, and ability to understand how to take deductions.
“...Tax refunds are a no interest loan to the government. Every dollar you get in a tax refund is a dollar that you could have taken home at some point during the year…”
—M. K.
Tax consultant
But Who Gets the Biggest Benefit? Business, of Course!
- Don’t have to set up employees
- Don’t need a Human Resources department
- Don’t have the same payroll expenses
- Don’t have the same tax liability
- Don’t pay unemployment tax
- Don’t pay overtime
- Don’t pay Workman’s Compensation
Many Independent Contractors Don’t Understand What 1099 Status Means
“Working for a construction company, I thought I was making pretty good money until I had to pay taxes at the end of the year. Then I realized how little I was making, so I quit.”
—J
self-employed small business owner
“Somebody got hurt on the job — his foot got run over — so my boss said he had to put us on the books. He said we would get a 1099 at the end of the year. I didn’t know what a 1099 was so I didn’t pay attention. At the end of the year I got a sticker shock.”
—A
1099-status worker employed with a moving company
Employers Don’t Supply Information or Tools
Don’t Tell, Don’t Ask
Employers don’t explain, and workers don’t ask how 1099 status will affect their wages. Workers tend to sign whatever paperwork the company requires without question.
“I give my employees the paperwork. But then they’re on their own.”
—J
Small business owner
“The full toolkit we provided for 1099 workers was super confusing… The company cannot legally give tax advice, but can only point towards resources.”
—H
OnDemand Delivery Overseer
Employees Struggle to Set Aside EOY Tax Payment Funds
“My first year of freelancing I had to take out a loan to pay my taxes.”
—K
1099-status worker employed in the arts
Lack of Trust in Financial Institutions
“Money was taken out of my bank account without my permission in 2013. I was stranded in New Jersey with no way to get home. Since then I haven’t used a bank.”
—K
Small business daycare owner
“I keep my money at home.”
—T
Retired sanitation worker
Credit Unions as an Alternative to Banks for Low-income People
“I told my friend about the Municipal Credit Union. ‘You know,’ I said to him, ‘you start putting aside $20, $30, $40, before you know it, you have enough money for a downpayment on a house.’ Later he called me up to to say thank you. Turned out he had $8,000 in there.”
—T
Credit Unions in Combination with Squirrel for Saving
Prototype of Chat Bot
