Like it or not, the gig economy and its innovations (such as ride-hailing apps) have changed the world. However, income from the gig economy is subject to the same tax obligations as other forms of income. Keep reading to learn more.
What Is the Gig Economy?
The term “gig economy” refers to the people who earn income providing on-demand services, very often with the aid of an app who connects them with users who need those services.
According to a recent study, 16 percent of Americans say they have earned money from an online gig platform.
Of that 16 percent, 31 percent said the online gig was their main job, while for 68 percent of the respondents it was a side job.
With this information in mind, it’s important to remember that this type of income must be reported on a tax return, even if you consider your gig economy activity to be only a side job.
But how do you report this income?
Reporting Income From the Gig Economy
You have to report income from the gig economy no matter how you get paid. This includes goods, cash, property, or virtual currency.
As a gig economy worker, you have two options to cover your income taxes:
- If you have another job where you are an employee, you can submit a new W-4 form to your employee so that more income is withheld from your paycheck.
- You can also make quarterly estimated tax payments to pay your taxes throughout the year.
While the rules seem clear-cut, we know that every situation is different. If you are a gig economy worker and need help making sense of your taxes, don’t hesitate to contact our experts at Delgado’s Insurance.
Our team will be happy to assist you and help you file your taxes on time and accurately.
Delgados Insurance: We Make Tax Filing Easy
Whether you are an employee or in the gig economy, taxes don’t have to be complicated. At Delgado’s Insurance, we help you maximize your refund while staying compliant with all relevant laws and regulations.
We have locations in Riverside, California, and Bloomington, California. Contact us today by telephone (951-361-0084, 909-421-9003), email (firstname.lastname@example.org), or through our social media accounts (Facebook, Twitter).