Gig workers continue to represent one of the fastest growing segments of the economy, but the way the self-employed (whether you’re fulltime or your gig is a side hustle) is different than as an “employee.”
Because an employer isn’t withholding money for federal or state (depending on where you live) income tax, this responsibility falls squarely on your shoulders.
If you receive one or more Form 1099s (required when a client or customer pays you at least $600 per year), you should be paying your income taxes every quarter: Typically, April 15, June 15, September 15, and January 15 of the following year. If you don’t not pay enough of the four estimated tax installments, you may be subject to penalties.
The good news is that you have more deductions at your disposal because of your business-related expenses, such as payment processing fees, equipment, and possibly even a home-office deduction. Your income taxes are based on profits after deducting business-related expenses.
The key for gig workers is keeping accurate records of your revenue and expenses.
Contact Morris and Associates today for a FREE consultation to discuss a good record keeping system and what deductions you may be eligible for.