[1]The IRS wants freelance or “gig” workers to understand that their work is taxable [2] 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 [3]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 [4].