Do you know what is gig economy?

Taxpayers who work in the gig economy need to understand how their work affects their taxes.

The gig economy is also referred to as the on-demand, sharing or access economy. People involved in the gig economy earn income as a freelancer, independent worker or employee.

This income is usually taxable even if the:
✔Taxpayer providing the service doesn’t receive an information return, like a Form 1099-MISC, Form 1099-K, or Form W-2.
✔Activity is only part-time or side work.
✔Taxpayer is paid in cash.

People working in the gig economy are generally required to pay:

✔Income taxes.
✔Federal Insurance Contribution Act or Self-employment Contribution Act tax.
✔Additional Medicare taxes.
Workers who do not have taxes withheld from their pay have two ways to pay their taxes in advance:
✔Gig economy workers who have another job where their employer withholds taxes from their paycheck can fill out and submit a new Form W-4. The employee does this to request that the other employer withholds additional taxes from their paycheck. This additional withholding can help cover the taxes owed from their gig economy work.
✔The gig economy worker can make quarterly estimated tax payments. They do this to pay their taxes and any self-employment taxes owed throughout the year.

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