Love being your own boss? It has its perks! Working in the gig economy means you can earn quick cash, choose your own hours and do something you really love. It’s no wonder the U.S. has one of the fastest-growing gig economies in the world.
But there’s a catch: Be prepared to pay your own taxes.
Good news is, tax planning isn’t as scary as it might seem. With a little planning and tools like Keeper Tax, you can sail through tax season with low stress and maximum savings.
Gig Worker Tax Tips
As a gig worker, the IRS considers you a self-employed, independent contractor. That means no one is deducting taxes from your paycheck—it’s all on you to pay what’s due and know your responsibilities.
Check out our 5 money-saving tax tips!
- Self-employment tax
- Estimated tax payments
- Common deductions
- Recording keeping
- Save and stay organized with Keeper Tax©
Here’s some important info to help you get and stay on track with your IRS tax obligations:
1. Self-employment tax
As a gig worker, you pay a self-employment tax in addition to your standard income taxes. This is similar to the Social Security and Medicare withholdings deducted from a traditional employee’s paycheck.
In 2019, the self-employment tax rate is roughly 15.3% of your taxable income.
2. Estimated tax payments
The IRS generally requires estimated tax payments on a quarterly basis if you think you’ll owe more than $1,000 in taxes. Quarterly payments are due on April 15, June 15, Sept. 15, and Jan. 15. (And there’s a penalty for late fees—so plan ahead!)
To help estimate your tax for the current year, use the worksheet in IRS Form 1040-ES or check out the free Quarterly Tax Calculator offered by Keeper Tax.
3. Common deductions
This is where there’s potential to save big at tax time! Self-employed individuals can reduce their taxable income by claiming business expenses like supplies, gas fill-ups, maintenance, etc. as tax deductions.
Record-keeping. Maintaining excellent documentation of expenses is critical, and it goes hand-in-hand with claiming deductions. If you can’t prove the expense was incurred, you can’t claim it on your taxes.
5. Save and stay organized with Keeper Tax©
So what’s a gig worker to do in this complicated world of payments, record-keeping and deductions? Track expenses and file your taxes with Keeper Tax!
Here’s a look at some highlights:
Tax savings. Worried about overpaying on taxes or missing a deduction? Keeper Tax has your back. As the #1 tax filing software for independent contractors, customers see an average of $300-$800 in tax savings on their returns.
Scanned documentation. Keeper Tax uses a secure Plaid connection to automatically scan your purchases and transactions for tax-deductible expenses.
Audit protection. Rest easy knowing every return is reviewed by a tax professional and backed by audit protection. If something goes awry, Keeper Tax will make it right.
Special savings just for AppJobbers! Get in on an exclusive Keeper Tax deal just for AppJobs members. Check out the discount and start stacking up savings!