First of all ...What is the Gig Economy?
The gig economy—also called sharing economy or access economy—is a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. There has been an uptick in activities where people earn income providing on-demand work, services or goods, often through a digital platform like an app or website.
Second ...What is Gig Work?
Gig work is temporary or freelance work performed by an independent contractor on an informal or on-demand basis. While the majority of gig work our clients may partake in is performance based, there are other activities you do to earn income, often through an app or website (digital platform), like:
- Drive a car for booked rides or deliveries
- Rent out property or part of it
- Run errands or complete tasks
- Sell goods online
- Rent equipment
- Provide creative or professional services
- Provide other temporary, on-demand or freelance work
Note: This list does not include all types of gig work.
Finally... Is Gig Economy Income Taxable?
Yes! You must report income earned from the gig economy on a tax return, even if the income is:
- From part-time, temporary or side work
- Not reported on an information return form — like a Form 1099-K, 1099-MISC, 1099-NEC, W-2 or other income statement
- Paid in any form, including cash, property, goods, or virtual currency.
Our clients will be asked to tell our office about their gig income in the 'Self Employment' section of our online organizer when submitting information at tax time. Be sure to keep records of your income throughout the year, as well as any expenses you incur as a result of your work in the gig economy. Using a separate bank account for your gig income and expenses is highly recommended, and be sure to save the receipts from your expenses. Our office's online organizer will ask for our clients' deductible business expenses at tax time as well.
To discuss any questions regarding your unique situation, please schedule a consultation at the following link - https://calendly.com/karasseipeltax