Many people take up gig work on a part-time or full-time basis, often through a digital platform like an app or website. Gig work, such driving a car for booked rides, selling goods online, renting out property, or providing other on-demand work, is taxable and must be reported as income on the worker\u2019s tax return.
\nHere are some things gig workers should know to stay on top of their tax responsibilities:
\nGig work is taxable:
\n\u2022 Earnings from gig economy work is taxable, regardless of whether an individual receives information returns. The reporting requirement for issuance of Form 1099-K changed for payments received in 2022 to totals exceeding $600, regardless of the total number of transactions. This means some gig workers will now receive an information return. This is true even if the work is full-time or part-time.
\n\u2022 Gig workers may be required to make quarterly estimated tax payments.
\n\u2022 If they are self-employed, gig workers must pay all their Social Security and Medicare taxes on their income from the gig activity
\nProper worker classification:
\nWhile providing gig economy services, it is important that the taxpayer is correctly classified.
\n\u2022 This means the business, or the platform, must determine whether the individual providing the services is an employee or independent contractor.
\n\u2022 Taxpayers can use the worker classification page on IRS.gov to see how they should be classified.
\n\u2022 Independent contractors may be able to deduct business expenses, depending on tax limits and rules. It is important for taxpayers to keep records of their business expenses.
\nPaying the right amount of taxes throughout the year:
\n\u2022 An employer typically withholds income taxes from their employees’ pay to help cover income taxes their employees owe.
\n\u2022 Gig economy workers who aren\u2019t considered employees have two ways to cover their income taxes:
\no Submit a new Form W-4 to their employer to have more income taxes withheld from their paycheck if they have another job as an employee.
\no Make quarterly estimated tax payments to help pay their income taxes throughout the year, including self-employment tax.
\nThe Gig Economy Tax Center on IRS.gov answers questions and helps gig economy taxpayers understand their tax responsibilities.<\/p>\n","protected":false},"excerpt":{"rendered":"
Many people take up gig work on a part-time or full-time basis, often through a digital platform like an app or website. Gig work, such driving a car for booked rides, selling goods online, renting out property, or providing other on-demand work, is taxable and must be reported as income on the worker\u2019s tax return. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[7,6,5],"tags":[182,181,149,183],"class_list":["post-1960","post","type-post","status-publish","format-standard","hentry","category-irs","category-sex-workers","category-taxes","tag-estimated-payments","tag-here-are-some-things-gig-economy-workers-should-know-about-their-tax-responsibilities","tag-social-security","tag-tax-payments"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/posts\/1960","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/comments?post=1960"}],"version-history":[{"count":1,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/posts\/1960\/revisions"}],"predecessor-version":[{"id":1961,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/posts\/1960\/revisions\/1961"}],"wp:attachment":[{"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/media?parent=1960"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/categories?post=1960"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/tags?post=1960"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}