5 Last-Minute Gig Worker Tax Tips for 2025
Written by
Ashley Donohoe
Edited by
Jenna Klaverweiden
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According to a 2025 Self Financial survey, 45% of Americans were working a side hustle this year. Whether you’re walking dogs, driving people, delivering food or doing freelance projects, gig work is great for extra income on a flexible schedule. But it also comes with some drawbacks, including a lack of employee benefits and the need to manage your own taxes.
As the year comes to a close, now’s the time to take steps that can help you slash your tax bill and have a smoother filing experience in 2026. From maximizing deductions to organizing your business records, here are five last-minute gig worker tax tips to know for 2025.
1. Understand What You Can Deduct
While being a gig worker comes with costs that employees don’t have to worry about, you can benefit from deducting business expenses that the IRS considers “ordinary and necessary.” Since these expenses lower your business’s profit, they’ll reduce your taxes owed across the board.
Depending on your type of gig work, you may be able to deduct things like supplies, mileage or actual vehicle expenses, platform fees, insurance premiums, marketing, continuing education, and equipment like computers. Plus, your home office might qualify you for a deduction.
You can check this IRS page for several guides on business expenses. Keep in mind that some purchases may need to be deducted over several years rather than all at once.
2. Consider Timing Your Income and Expenses
Since most gig workers use cash accounting, you can try to strategically time when you receive income and pay for business expenses so you can lower your 2025 tax bill. However, this can be tricky, so speaking with a tax professional is wise to avoid potential problems.
To delay income, you might hold off on taking on new work until the new year or invoice clients late enough so the payments arrive in 2026. The catch, though, is that the IRS doesn’t allow delaying reporting any income already considered available to you in 2025. So if a gig work app credited you money you can withdraw this year, you’ll owe taxes now even if you leave it there.
Making business-related purchases early may be easier. For example, you might pay for work-related software, marketing services, equipment, office supplies and other items that you’ll need in 2026. Just avoid buying things solely for the tax deduction.
3. Max Out Your Retirement Contributions
Maximizing your retirement contributions as a gig worker is wise for getting you closer to your savings goal and can even lower your 2025 tax bill. However, you might lack a traditional 401(k) unless you also have a traditional job that offers one.
The good news is you can still open a traditional IRA and contribute up to $7,000 (if you’re younger than 50) or $8,000 (if you’re 50 or older) in 2025. If you meet the IRS rules, you can deduct those contributions to get a lower adjusted gross income, which means less federal income tax. Instead, you’ll pay taxes on your withdrawals during retirement.
There are other options you can look into, such as a Roth IRA, SEP-IRA or solo 401(k), each with different limits, rules and tax consequences. Whichever account you contribute to, check if you’re also eligible for the saver’s credit, worth up to $1,000 per tax filer ($2,000 if married filing jointly).
4. Prepare Your Business Records
Record keeping can be tricky as a gig worker, and you might not have a system for organizing receipts, invoices, bank statements and other documents related to your income and expenses. Unfortunately, not having your business records in shape can cause headaches at tax time.
Take time to go through everything and sort documents by type, possibly in folders on your computer. It also helps to use a spreadsheet to start listing details about your income sources and expenses, and to consider upgrading to online accounting software for the next year.
A related last-minute tax move is separating your gig work finances from your personal finances — if you haven’t already. This will make it easier to track everything moving forward and provide proof in case the IRS audits you.
5. Catch Up on Estimated Tax Payments
Whether it’s your first year doing gig work and you haven’t paid anything, or your 2025 income is higher than you expected, get caught up on your federal estimated tax payments now if you expect a tax liability of at least $1,000. Not only will this help minimize IRS penalties and interest, but you’ll also avoid a large surprise tax bill in early 2026.
You can use the worksheet included in Form 1040-ES to figure out the federal income, Social Security and Medicare taxes owed. For the 2025 tax year, you should have already made sufficient quarterly payments on April 15, June 16 and Sept. 15, and the final one is due on Jan. 15, 2026. But if you’re behind, you can easily make an online payment.
Also, if tax time arrives and you do owe the IRS, you may still avoid a penalty as long as you paid last year’s full tax liability or 90% of what you owe this year.
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