ICBA Blog

The Gig Workers’ Guide to Getting Organized for Tax Time

The months and weeks leading up to tax day don’t have to be stressful. Here’s how to manage what feels like mayhem

If you’re suddenly feeling a little envious of your salaried friends who get one tax form from their one employer, file their taxes, and then magically receive a big refund from the IRS, you’re not alone. Tax time can be a bit confusing and nerve-racking for independent contractors. But we’ve put together this guide for gathering your necessary documents and making a plan for easy bookkeeping going forward.

Gather your 1099s.

What to do now: Your 1099-MISC forms should have trickled in during January. If you don’t have a list of the companies you worked for last year, make one now. Then track down a form for each of those companies, businesses, or clients. Check your email for forms that have been sent electronically. Log in to any app portals in case forms are waiting for you to download. Look through any snail mail stacks in your home as well.

What to do going forward: Start that company list now. Who are you working for this year? Add to it as you join various gig apps or staffing agencies. Next to each company make a note of how they provide your 1099-MISC form. You can usually find this out during any onboarding process. If you don’t know, ask. When tax time rolls around next year, you’ll be able to locate tax forms easy-peasy.

Find a tax professional or software to help (or both).

What to do now: Independent contractor taxes can get complicated. That’s why it’s helpful to find a local tax professional who specializes in gig worker taxes or to use software to help you file. TurboTax Self-Employed and H&R Block Self-Employed are great options if you prefer to file online. Both allow you to input your income and expenses and then have a CPA review your work and answer your questions before you file.

What to do going forward: Make a note of the expenses you were able to deduct, and be sure to keep track of those items going forward. Apps like FreshBooks, QuickBooks, Harvest, and more can help you log and categorize expenses automatically, just by connecting your credit or debit cards.

Look for ways to lower your tax liability.

What to do now: If your tax bill for this year is leaving you with a bit of sticker shock, ask your tax professional for advice on reducing how much you owe. An example may include making a contribution to your qualifying individual retirement account.

What to do going forward: Figure out your estimated taxes and be sure to make quarterly payments if you aren’t in the habit of doing so already. Talk to your tax professional about whether you should change business structures (i.e., sole proprietor, LLC, etc.) based on your income. Diligently track all gig-related expenses that qualify as deductions. If you’re a rideshare or delivery driver, for example, don’t forget about mileage tracking. Simplify the process with apps like Stride or Hurdlr. Visit the IRS’s Gig Economy Tax Center for more information on what you can deduct and how.