Tax Tip 2023-05: Tax tips for gig economy entrepreneurs and workers
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Issue Number: Tax Tip 2023-05
Tax tips for gig economy entrepreneurs and workers
In recent years, the gig economy has changed how people do business and provide services. Taxpayers must report their gig economy earnings on a tax return – whether they earned that money through a part-time, temporary or side gig. The IRS’ Gig Economy Tax Center provides information and resources to help this group of entrepreneurs and workers understand and meet their federal tax obligations.
Here are key things for individuals involved in the gig economy to remember as they get ready to file in 2023.
Gig economy income is taxable
Workers report income according to their worker classification
The business or the platform determines whether the individual providing the services is an employee or independent contractor. The business owners can use the worker classification page on IRS.gov for guidance on properly classifying employees and independent contractors.
Expenses related to gig economy income may be deductible
Pay the right amount of taxes throughout the year
Individuals involved in the gig economy have two ways to cover their taxes due:
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