Unlike traditional employees, gig workers usually receive Forms 1099 instead of W-2s, which means they’re responsible for their own tax withholdings, self-employment taxes and quarterly estimated payments.
The shift from employee to independent contractor requires you to adapt to new complexities in income reporting and tax planning. Additionally, gig workers often have diverse income streams, varying expenses and unique deductions that differ from traditional employment.
Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you can access the full recording and the entire list of Q&As.
Q: Can funds contributed to a GoFundMe campaign be claimed as a charitable deduction?
A: Only if the donation is made to a qualified 501(c) organization.
Q: If a taxpayer receives both a Form 1099-K and a Form 1099-MISC, isn’t there a chance of double-reporting the same income?
A: Unfortunately, yes. There have been cases where individuals received both forms for the same income.
Q: If I’m listing my property as a short-term rental using a website, why do I need to take the mortgage on the property into account?
A: Some mortgage lenders may not allow you to rent out a property that’s financed with a homeowner’s mortgage.
Q: Are funds received from a GoFundMe campaign taxable to the recipients?
A: GoFundMe payments are generally not taxable to recipients, but the organizer might sometimes receive a Form 1099-K.
To learn more about tax reporting for gig income, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial.
About National Association of Tax ProfessionalsThe National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.
The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.