Driving for two apps and delivering groceries on weekends brought in about $52,000 last year, more money than any job she'd held before.
Then her tax preparer slid a number across the table: she owed $8,400 to the IRS.
Millions of Americans who started gig work in the past few years are discovering that nobody withholds taxes from their paychecks.
There's no HR department, no automatic deduction, no W-2 in January.
Every dollar that lands in a gig worker's account is treated as untaxed income, and the bill comes due all at once in April.
Here's the math that catches people off guard.
Traditional employees split their payroll taxes with their employer, each paying 7.65 percent.
Gig workers pay both halves, or 15.3 percent, on their net earnings.
On top of that comes federal income tax and, in most states, state income tax.
Someone earning $50,000 in gig income can easily face a total tax bill north of $10,000.
There is one big cushion, and it's the most overlooked part of the whole system.
Gig workers can deduct mileage, and the standard rate for 2024 is 67 cents per mile.
Someone driving 20,000 miles for work can knock $13,400 off their taxable income before anything else.
Phone bills, hot bags, parking, and a portion of home internet can count too.
The catch is that these deductions only help if the miles and expenses are tracked, and most apps stop logging mileage the moment a driver goes offline.
The IRS expects self-employed workers to pay estimated taxes four times a year, not once in April.
Skip those payments and penalties and interest start stacking up, even if the final April check is on time.
Workers who set aside 25 to 30 percent of every payout into a separate savings account tend to avoid the panic that Dana felt.
There's a growing industry of apps and tools built around this problem, from mileage trackers to tax software with self-employment modes.
But the cheapest fix is the simplest one: open a second bank account, move a quarter to a third of each deposit into it the day it arrives, and treat that money as already spent.
Come tax season, the bill is annoying instead of devastating.
The deeper issue is that gig platforms have every incentive to call workers independent contractors, and workers have almost no leverage to change that.
So the burden of figuring out withholding, deductions, and quarterly deadlines falls on people who were never trained for it and were told they'd be their own boss.
Being your own boss, it turns out, means being your own payroll department too.
The gig economy isn't going anywhere, and neither is the tax bill that comes with it.
What needs to change is the onboarding — a one-page crash course on setting aside money would save millions of people from a very bad April.
Final Thoughts
Until the apps do that, the smartest move is to assume the IRS is watching and act accordingly.