If you drive for a rideshare app, deliver food, or rent out a spare room, there's a number you need to watch this year: $600.
For the third time in three years, the rule about when payment apps have to send you a tax form has been fought over in Washington, and the back-and-forth has left a lot of gig workers confused about what's actually owed.
Here's the part that hasn't changed, no matter what Congress does: if you earned the money, it's taxable.
The $600 figure only decides when a platform like Uber, DoorDash, Etsy, or Airbnb has to mail you a 1099 form and send a copy to the IRS.
The income itself has always been reportable.
There's no magic threshold that makes side-hustle money disappear.
That distinction matters because a lot of workers hear "the $600 rule got delayed" and assume they're off the hook.
The IRS still expects you to report every dollar of self-employment income, even if no form ever shows up in your mailbox.
If you made $1,400 delivering groceries and no 1099 arrives, you still owe tax on it.
The bigger sting for gig workers isn't income tax, it's the self-employment tax.
When you're a regular employee, your boss quietly pays half of your Social Security and Medicare taxes.
As an independent contractor, you cover both halves yourself, which works out to 15.3% on top of whatever you owe in federal and state income tax.
That's the number that blindsides first-time gig workers in April.
You can deduct ordinary and necessary business expenses, and for drivers that's often substantial.
The IRS standard mileage rate lets you write off a set amount per business mile, and it covers gas, insurance, repairs, and depreciation all in one figure.
Keep a log, even a simple app-based one, because a deduction you can't document is a deduction you can't take.
Other deductions gig workers commonly miss: the platform's service fees, phone bills used for work, a portion of your home internet, supplies, and even the employer half of your self-employment tax itself.
You can also set up a SEP IRA or solo 401(k) to shelter part of what you earn, which can shave a real chunk off your bill.
The practical move is to stop treating April as a surprise.
Set aside roughly 25% to 30% of every gig payment as it comes in, in a separate account you don't touch.
If you expect to owe more than $1,000 for the year, the IRS wants quarterly estimated payments, and skipping them can trigger underpayment penalties on top of your tax bill.
None of this requires a fancy accountant.
It requires tracking what you earn, tracking what you spend, and not pretending the two cancel out.
Most gig workers who get hit hard in April simply didn't put money aside during the year.
The gig economy runs on the promise of flexibility, and the trade-off is that nobody withholds taxes for you.
Final Thoughts
Budget for it like a bill, and tax season stops being a crisis and becomes a chore.