There are some important tips to remember if you work as a gig worker:
- All income from these sources is taxable, regardless of whether you receive information returns. This includes both full-time and part-time work and also if you’re paid in cash.
- As a gig worker, it’s important that you are correctly classified as an employee or an independent contractor. This can depend on where you live, even for the same services.
- Lastly, it’s important to remember to pay the correct amount of taxes on this income throughout the years to avoid owing when you file. Because gig employees don’t have an employer withholding taxes from their paychecks, they can either submit a new W-4 and have their employer withhold more from their paycheck (if they have another job as an employee) or make quarterly estimated tax payments throughout the year.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov7
- IRS.gov, September 19, 2020