If you drive for Uber, deliver food for DoorDash, rent property on Airbnb, sell items on Etsy, or provide other on-demand work, you may have been overlooking your tax responsibilities.
Gig work is taxable and must be reported as income on your tax return. To help avoid a large tax balance, here are some things you should know:
Gig Work is Taxable:
Earnings from gig work is taxable, whether or not you received an information return or 1099-K
If you do not have any other employment outside of gig work, you must pay all of your Social Security and Medicare taxes based on your gig work income
If you are an independent contractor, you may able to deduct business expenses such as automobile expenses, supplies, or equipment. Keep records of your business expenses throughout the year.
Pay Taxes Throughout the Year to Reduce Your Tax Balance:
If you have another form of employment in addition to gig work, you can submit a new W-4 form to your employer to have more income taxes withheld from your paycheck
If you do not have any other employment outside of gig work, make quarterly estimated tax payments
For more information regarding gig work and tax responsibilities, contact Safdar CPA today.