Freelance (or gig) workers need to keep these tax rules in mind
The IRS wants freelance or “gig” workers to understand that their work is taxable for payments received in 2022 to totals exceeding $600, regardless of the total number of transactions or whether the work is full-time or part-time.While an employer generally withholds income taxes for employees, gig economy workers who aren’t “employees” have two ways of covering their income taxes: (1) submit a new Form W-4 (Employee’s Withholding Certificate) to their employer to have more income taxes withheld from their paycheck if they have another job as an employee; or (2) make quarterly estimated tax payments to help pay their income taxes throughout the year, including self-employment tax.
Gig workers, like other workers, must be properly classified as an employee or contractor. The IRS offers a worker classification tool that can be used to help make this determination. If you are a freelance worker and have questions about paying your taxes, please contact a ShindelRock tax professional.