If you drive for a rideshare app, deliver groceries, or rent out a spare room, the tax paperwork landing in your inbox this month may look different than last year's.
A phased-in rule means payment platforms and apps are now reporting your earnings to the IRS on a lower threshold than before, and that shift is catching some workers off guard.
For years, many gig workers flew under the radar because apps only sent a 1099 form once you cleared $20,000 in payments and 200 transactions.
The new standard drops that trigger to $5,000 for the 2024 tax year, with plans to eventually lower it to $600.
If you earned more than a few thousand dollars on a platform, expect a form you may not have received before.
But that distinction gets lost fast when the IRS also receives a copy, which means unreported income is far easier to spot.
Workers who used to treat small side earnings as invisible now have a paper trail attached to their name and Social Security number.
The bigger bite for most gig workers isn't income tax — it's self-employment tax.
Employees split Medicare and Social Security taxes with their boss, but independent contractors cover the full 15.3 percent themselves.
On $30,000 of gig income, that's roughly $4,590 before you even factor in federal or state income tax.
You can deduct the employer-equivalent half of self-employment tax, plus business expenses like mileage, phone use, and supplies.
Mileage is often the single biggest write-off for drivers, and tracking it properly can swing a tax bill by hundreds or thousands of dollars.
The catch is that most people estimate instead of logging, and estimates don't hold up well in an audit.
Quarterly payments trip up a lot of first-timers.
Because no one withholds from gig pay, the IRS expects estimated payments four times a year.
Skip them and you can owe a penalty on top of your balance, even if you pay everything in full by April.
Set aside roughly 25 to 30 percent of each payout in a separate account so the money is there when the bill arrives.
Dig through your apps for annual earnings summaries, which many platforms bury in settings.
And if your side income is new or messy, a single session with a tax preparer who knows gig work often costs less than the penalty for guessing wrong.
None of this is a reason to quit gig work.
It's a reason to stop treating it as cash that doesn't count.
The platforms already report it, and the threshold keeps dropping, so the gap between what you earn and what the IRS knows about is closing whether you plan for it or not.
The workers who come out ahead here aren't the ones earning the most.
Final Thoughts
They're the ones who started setting money aside in January instead of scrambling in April.