Latest IRS Guidance on Gig Workers

Whether it’s a full-time job or just a side hustle, taxpayers must report gig economy earnings on their tax return. Understanding how gig work can affect taxes may sound complicated but, it doesn’t have to be. The IRS offers several resources to help gig economy taxpayers properly fulfill their tax responsibilities.

Here are some things gig workers should keep in mind.

Gig work is taxable:

  • Earnings from gig economy work is taxable, regardless of whether an individual receives information returns. The reporting requirement for issuance of Form 1099-K changed for payments received in 2022 to totals exceeding $600, regardless of the total number of transactions. This means some gig workers will now receive an information return. This is true even if the work is full-time, part-time or if an individual is paid in cash.

Check worker classification:

  • While providing gig economy services, it is important that the taxpayer is correctly classified.

Pay the right amount of taxes throughout the year:

  • An employer typically withholds income taxes from their employees’ pay to help cover income taxes their employees owe.

Source: IRS.gov

--

--

A blog created by CPE Warehouse to provide all tax professionals with relevant updates and information. Subscribe to stay up to date and learn more!

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Tax Bytes

A blog created by CPE Warehouse to provide all tax professionals with relevant updates and information. Subscribe to stay up to date and learn more!