If you drove for Uber, delivered for DoorDash, or sold crafts on Etsy in 2024, there's a good chance your tax bill is bigger than you expected.
It's an old one that more gig platforms are now reporting to the IRS — and more workers are getting caught off guard by it.
The IRS threshold for sending a 1099-K form used to be $20,000 in payments and 200 transactions.
Platforms like eBay, Etsy, Uber, and Airbnb now have to report your earnings once you cross that line, which means the IRS sees the money whether you file it or not.
Gig workers owe both halves of Medicare and Social Security taxes — 15.3% on net earnings.
When you're a regular employee, your boss covers half.
When you're your own boss, you cover all of it.
On $30,000 of net gig income, that's roughly $4,590 before you even get to federal income tax.
The standard mileage rate for 2024 was 67 cents per mile.
A delivery driver logging 15,000 business miles can deduct about $10,050 — which can wipe out a big chunk of what they owe.
Phone bills, hot bags, car maintenance, and a home office can all count too.
Set aside roughly 25% to 30% of your gig income in a separate savings account as you earn it.
If you owe more than $1,000 for the year, the IRS can tack on an underpayment penalty on top of the tax itself.
One more thing worth knowing: you may qualify for the Earned Income Tax Credit or the new deduction for qualified business income, which lets many self-employed people deduct up to 20% of their net business income.
Free filing options exist through IRS Free File if your income is under $84,000, and many tax software tools now handle 1099 income without charging extra.
The bottom line: the 1099-K change isn't a money grab aimed at gig workers.
It's the IRS finally seeing income that was always taxable.
The workers who come out ahead are the ones who treated their side hustle like a business all year — not the ones who waited until April to do the math.
Final Thoughts
Track every mile, save every receipt, and set money aside as you go.