The IRS states that you must report gig economy income over $600.
The IRS has come out with a clear and resounding YES on this one. The reporting requirement for issuance of Form 1099-K has changed to totals exceeding $600, no matter how many transactions bring you to that total. Some gig workers will now receive an information return whether they are part time, full time, or paid cash. Gig workers may now also be required to pay estimated income tax payments quarterly and pay into SSI and Medicare.
Taxpayers can refer to the worker classification page on IRS.gov to see how they are classified. If classified as independent contractors, they may be able to deduct certain business expenses.
It is important that gig economy workers make sure they are paying the right amount of taxes throughout the year. If gig workers have another job, they can do this by submitting a W-4 to their employer to have more taxes taken out throughout the year. If not, gig employees can make quarterly estimated tax payments including self-employment tax to cover their responsibilities.
If you are unsure about how to claim your gig economy income on your taxes, the experts at Peter Witts CPA PC are here to help.
I’m Kristin, the PWCPA PC Customer Success Specialist. For more information about this topic, or any other, you can always reach me through our customer ticketing system.
