The Gig Economy - Resources, Taxes, and Advice

Guest Blogger, Sue Ann Daniels*

A few weeks ago we looked at some websites that are a great start for particular gig jobs.  But there are a few sites that are sort of “gig universal” or a good place to start for almost all types of gigs.  Be sure to check out:

•  Guru.com
• TaskRabbit.com
• Fiverr.com
• FlexJobs.com (this site does have a monthly fee, but if you are having trouble finding the work you need, it is a great resource, and you can sign up for as little as 1 day.  I personally have used it and it was a great resource).

Even standard job finding sites, such as Monster.com, Indeed.com, and ZipRecruiter.com now all have gig jobs listed.  Search for “gig”,  “part-time” or “short term” to help you find gig type work.  Check out the Human Services Outcomes Career Resources Center for additional information on Gig work, as well as other types of work opportunities.

And don’t forget word of mouth.   Ask around.  Talk to your friends and neighbors. Post on social media. You never know who many need some sort of work that you can perform.

So, we have now talked about deciding on what kind of gigs to peruse and looked at many resources to help you find those gigs.  Let’s now talk about some important issues that gig workers need to keep in mind…

You are an Independent Contractor. For most gigs, you are an independent contractor, or 1099 worker.  That means your employer does NOT take out any money for Federal, State, or Local Taxes, nor do they contribute to your Social Security or Medicare.  In January of each year, the employer will send you an IRS form that lists the amount of money you made with them for the previous year.  This money is also reported to the federal government.  If you make under $600, the company is not required to send you this form.  However, you ARE still required to track the money you make and report it as income.

Stay Organized. If you are not working for any type of company, but are finding gigs on your own, you need to stay very organized and have some sort of tracking system for all of the money that you make.  An Excel spreadsheet is great.  I track every payment I get in a spreadsheet and notate who paid me and on what date.  Then, for tax purposes, I can easily add up the income I have made.  As a self-employed person, currently you're required to report your self-employment income if the amount you receive from all sources totals $400 or more. Again, it is your responsibility to report the money that you make.  

Taxes.  Filing your taxes as a contract employee or gig worker can be a bit daunting.  Instead of having everything laid out nicely on your W-2, you have to fill out a few more forms for income reporting. It  is possible that you may be allowed to claim some deductions (such as home office use, auto use, etc), so be sure to keep track of your expenses.  And when it comes to tax time, be sure to consult your tax advisor for advice that pertains to your specific situation.  

And here is one of the biggest things to remember as a gig employee – taxes owed can add up.  Not only do you have to pay your income taxes, but since you are self-employed you may need to pay Social Security and Medicare taxes.  Think about saving out some of the money you make to pay for your taxes.  And one more caveat…you may need to pay your taxes quarterly.  Again, be sure to consult your tax advisor for advice that pertains to your specific situation.  

Lack of Benefits. One other thing to keep in mind…if you are looking at gig work as a way of life, and plan to leave full time work (or have already lost full time work), most likely you will lose any health benefits, vacation time, sick days, etc.  With gig work, if you don’t work, you don’t make money.  You will need to look at options such as the Affordable Care Act to find health insurance. 

Gig work is not for everyone, but most likely, it is here to stay.  Some career experts even think it may become a predominant form of employment after the pandemic ends.   Gig work can be a great way to supplement your income and bring greater flexibility into your work/life balance.  It can allow retirees to increase their income, students to earn extra money for school, and for people to try out a new career path without fully committing. It can be a bridge between full-time jobs if you lose one job and are searching for another.  And as employers are looking to cut costs during and after the pandemic (full time employees are much more expensive to hire than gig workers, because of the benefits) expect the gig economy to grow.  

And if you are looking for passion and meaning in your work, either gig or otherwise, be sure to check out Dr. Steven Simon's book, RELAUNCH!, for top notch information and guidance on finding the job you love, no matter what type of work it may be. 

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*Sue Ann Daniels has been a Gig worker for 4 years, after 12 years as a small business owner and 20 years in the corporate world.  She currently works part-time for Human Services Outcomes as Dr. Simon's assistant, as well as doing gig work for 2 other companies.