4 Ways Side Gig Workers Can Simplify Their Taxes
Written by
Chris Adam
Edited by
Jenna Klaverweiden
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Tax season can be especially frustrating for gig workers — the millions of self-employed professionals who likely need to follow different rules when figuring out how much they owe the government.
But there’s good news for those workers. Changes to tax rules and how these workers are viewed by the IRS could help when filing taxes, according to TurboTax. Now gig workers have additional opportunities for deductions that could reduce tax bills.
Still, doing taxes as a gig worker can be difficult. For gig workers who also want to reduce their tax headaches, here are a few ideas.
Hire a Professional
This tip may apply to just about any taxpayer. Hiring a professional can help make tax season go smoother. For gig workers specifically, tax preparers may know about special rules or deductions, saving gig workers money and hassles.
According to U.S. News & World Report, tax professionals can help filers avoid mistakes and maximize deductions.
Keep Organized
Keeping organized can help reduce stress as a gig worker. This may be especially true when it comes to tax time. The IRS recommends gig workers keep records during the year. Doing so could make tax time simpler, as they won’t be scrambling to compile all their receipts and information.
Per TaxAct, organizing your work and pay records can make the entire tax process much easier and less stressful. Apps commonly used in gig work can also help streamline this process.
Understand Tax Obligations
This is also an area where a tax professional may prove useful. Gig workers need to understand how they’re classified for tax purposes and the obligations they face. Knowing this information from the start can make the entire tax process much easier.
For example, some gig workers may need to pay quarterly estimated taxes, per H&R Block. Knowing tax obligations ahead of time can help gig workers avoid costly mistakes.
Plan Ahead
For anyone filing taxes, planning ahead is important. But that can be especially true for gig workers.
Gig workers who plan ahead to make quarterly payments can take a bit of time to try other long-term tax planning strategies. Along with using a retirement plan that has tax benefits, gig workers can regularly put aside some money in a place to keep it for taxes.
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