Expert Networks, the Gig Economy, and Taxes
If you have completed a consultation through the Expert Network, you are now a part of the gig economy. You know firsthand how flexible and convenient it can be to work on your own terms, but it is important to remember that taxes still apply to gig work.
Here are a few things to know about taxes and the gig economy:
Just like any other job, money earned through the gig economy is taxable. This means that if you receive income from a consultation, it is generally taxable, even if you do not receive a Form 1099-MISC, Form 1099-K, W-2, or other income statement.
As an expert consultant, it is your responsibility to keep track of the money you make and report it on your tax return. This means keeping good records of your income and expenses.
While your business expenses may be deductible, it is important to pay your taxes as you go. If you are an employee, your employer will usually withhold tax from your pay to help cover taxes you owe. If you are not considered an employee, you can make quarterly estimated tax payments or update your Form W-4 for other jobs where you work as an employee to help cover your taxes throughout the year.
If you are concerned about whether you are making sufficient tax payments, you can use the IRS Withholding Estimator to do a Paycheck Checkup. This can help you avoid an unexpected tax bill or underpayment penalty when you file your tax return.
Remember to factor in taxes when planning your finances as an expert network consultant. A little bit of planning and organization can go a long way in avoiding headaches later on. If you would like additional information, go to the IRS website for Gig Economy Tax Responsibilities.