TaxSlayer Survey: Millions of Americans Doing Gig Work, but 40% Miss Out on IRS Tax Deductions
Tuesday, April 17th, 2018
As the gig economy continues to grow, a new survey from TaxSlayer found that nearly three in ten Americans (28 percent) have two or more sources of income to report to the IRS. Of those who work multiple jobs, 38 percent say they do it to supplement their income, 23 percent like the flexibility and 21 percent are holding the job to make ends meet.
Nearly 40 percent of respondents shared that they do not take deductions related to independent or gig work. These individuals may be missing out on additional tax return benefits that may put money in their pockets.
Of terms of how they describe themselves, 33 percent identified as self-employed, 27 percent as part-timers, 19 percent as freelancers and 15 percent as side hustlers. Of these various workers, over a third (33%) choose to file their taxes in February. However, 17 percent wait until April to start filing.
"For many people, independent work allows them to earn a living in a way that makes sense with their schedules, passions or financial goals," said Mark J. Kohler, senior tax adviser at TaxSlayer. "Earning supplemental income should not be met with filing challenges. At TaxSlayer, we provide so that all Americans can file hassle-free, including those in the gig economy."
To prepare to file your 1099 taxes this season, TaxSlayer recommends:
Keep Receipts: And logs of vehicle-related expenses, like car repairs, oil changes, gas, car loan interest, and mileage. When it comes time to deduct, you'll choose between a standard mileage rate and your actual expenses.
Moving on Out: you may be able to deduct moving costs if your move is closely related to the start of work, passes the distance test and passes the time test. Form 3903 can help with this.
Work from Home: Is your home a place of business? Do you use it for storage or run a daycare center? You may be eligible for additional deductions.
On the Road Again: If you travel for your job, some costs related to that travel may be deducted, as long as your employer did not reimburse you for those expenses. These include: parking fees, tolls, hotels, airfare and car rentals.
Determine Deadlines: Based on your tax situation, there could be different deadlines you need to know. And remember that "Tax Day" is not always April 15. The date can shift slightly from one year to the next. This year the deadline is April 17, 2018.
Penalty Awareness: If you're due a refund from the IRS there's no penalty if you file a late tax return. However, the IRS recommends you file a tax extension. But if you owe taxes and you fail to file and pay on time, you'll usually owe interest and penalties on the taxes you pay late.