Tax Tip Tuesday: Tax Tips for Summer Gig Workers

Summer is a great time to earn extra income—whether you’re delivering food, walking dogs, tutoring, or working for rideshare services. But gig work comes with tax responsibilities you can’t afford to ignore. Here’s what summer gig workers should know.

1. You’re Self-Employed, Even for Short-Term Work - If you're not receiving a W-2, the IRS considers you self-employed. That means you're responsible for both income tax and self-employment tax (Social Security and Medicare), usually filed using Schedule C and Schedule SE.

2. All Income Must Be Reported - Whether you're paid in cash, through apps like Venmo or Zelle, or by direct deposit, all of your income is taxable—even if you don’t receive a 1099. Keep a record of every dollar you earn.

3. Track Your Expenses—They’re Deductible- You can deduct “ordinary and necessary” business expenses from your taxable income. This might include mileage, your phone bill, supplies, internet costs, or software used for work. Be sure to save your receipts and maintain clear records.

4. Watch for Form 1099-NEC and 1099-K- You may receive a Form 1099-NEC if you earn $600 or more from a client. For platform-based work (e.g., Uber, DoorDash, PayPal), you may receive Form 1099-K if you meet the IRS threshold—currently $5,000 in 2024 and expected to drop to $600 in future years.

5. Consider Quarterly Estimated Tax Payments- If you expect to owe more than $1,000 in tax for the year, you may be required to make estimated payments each quarter. These payments help you avoid underpayment penalties and interest.

6. Check for State and Local Tax Obligations - Some states require estimated tax payments or have additional tax rules for independent contractors. Make sure you're in compliance with both federal and state tax laws.

7. Use the Right Forms at Tax Time- When you file, you’ll likely need to complete:

• Schedule C (Profit or Loss from Business)

• Schedule SE (Self-Employment Tax)

• Form 1040 (Individual Income Tax Return)

  
  

Track income and expenses now to save yourself stress later. Summer gig work can be a great way to boost income, but smart tax planning is key to keeping more of it. Working with a tax pro can help you navigate all this smoothly, contact May Sung at info@mkhstaxgroup.com.