What is the Gig economy? The Gig economy is basically is a new way of earning income that has evolved over the last few years. It involves earning income sporadically, off and on, as opposed to a “steady” job where one gets a check every payday, and it is expected, and people plan on getting that check. With the Gig economy, there are no guarantees of when you will be paid for your products or services.
The Gig economy is also referred to as the sharing economy, or access economy, where people earn income providing on-demand products or services, often by using a digital platform like an app or website.
If you are involved in the Gig economy, the important thing to remember is that your income is taxable. If your income is reported on an IRS Form 1099-Misc., then the IRS will consider you self-employed, and you must pay all of your Social Security taxes instead of half, if you are an employee paid on a W-2. If you are self-employed, you must file your income tax return as a self-employed person. You are also required to keep receipts for any allowable business expenses that you can deduct from your taxable income.
The Gig economy is a great way to make a living if it suits you and you enjoy doing it. Just be aware that your income is taxable, and whether you are self-employed, or a wage earner (paid on a Form W-2), you income taxes are going to be a little more complicated and you may want to contact a tax professional at tax time.
You can get more information from the IRS about the Gig economy online at the IRS’s Gig Economy Tax Center.