Now that you’ve built some momentum and got a real income stream, it’s time to start thinking about running your gig work like a business. Let’s start with the basics of how to manage your gig taxes because you don’t want to get this wrong! If you are earning money from gig work, the IRS sees you as self-employed, which means you are responsible for your own taxes. If it sounds overwhelming, fear not. We’ll show you how to get started with a few simple habits and break down exactly what you need to know about taxes in 2025.
How Gig Taxes Work in the USA
When you earn money through gig apps, you’re considered self-employed, and the most important thing to remember about this is that you’re responsible for your own taxes. Here are some basic facts:
If you earn more than $400/year from gig work, the IRS will expect you to pay estimated taxes four times a year: January, April, June, and September. You’ll need to use Form 1040-ES.
On top of any regular income tax you pay, if you are doing gig work, you will also owe about 15.3% self-employment tax, which includes social security and Medicare.
You’ll get a 1099-NEC or 1099-K form for filing if you earn more than $600 on one gig platform.
Tax Deductions for Gig Workers
You can – and should – lower your tax bill by claiming deductions. Deductions are items that reduce the amount of income you are taxed on. Here are some of the most common deductions for gig workers:
Mileage
If you drive for your gig work, you can deduct money for every mile you drive. Currently, the IRS states $0.67 per mile, but check the website for the latest numbers.
Phone and Internet
If you use your phone or WiFi for your gig work, you can deduct part of these costs. Say, for example, half of your phone time is used for gig work. In this case, you can deduct 50% from your tax bill.
Supplies
You may purchase supplies to support your gig work, like office equipment or delivery bags. Keep the receipts because these are all deductible expenses.
Home Office
If you have a home office for your gig work, you might be able to deduct a part of your rent, utilities, or home insurance.
Tips to Help Manage Your Gig Taxes
Tax might feel overwhelming for many of us, but it doesn’t have to be. Here are a few simple tips to help you stay organized:
Separate Your Gig Income
Use a separate bank account for your gig work. It will make it easier to track how much you’re earning and separate personal finances.
Track Your Expenses Daily
Tracking expenses can become a mountain if left for several weeks or months. Get into the habit of using an app like Mint to track all your expenses daily.
Save for Taxes as You Go
Set aside a quarter of your payments for tax. That way, you won’t have the stress of trying to get the money together when your tax is due.
File Quarterly Estimated Taxes
If you expect to earn more than $1000 in a year with gig work, use the IRS Form 1040-ES to pay tax in January, April, June, and September.
Use Tax Software
Did you know that some apps and tax software offer free accounts? Apps like TurboTax Self-Employed can make it easier to stay on top of your tax responsibilities and save you time and stress.
Tax List: Making Your Gig Work Tax-Ready
Are you ready to get organized with your taxes? Here is a quick checklist of tasks:
- Set up a separate bank account for your gig work
- Track your expenses daily using an app like Mint
- Download free tax software like TurboTax
- Set aside a quarter of your monthly earnings for tax payments
- Log your mileage using a tool like Everlance
- Check any gig-related deductions you can make
Small steps now will help you avoid bigger mistakes later on and let you keep more of your hard-earned cash. Once you’ve completed this stage, you’re ready to learn more in Guide 9 of our series, which you can find right here.