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If you’re an independent worker, you enjoy certain freedoms and flexibilities with your job. But even when you are your own boss, the IRS still gets their share. When tax time comes, make sure your money works as hard as you do: claim your deductible expenses to lower the bill, or maybe even help you score a refund. What exactly is a deduction? A tax deduction (or write-off) is an expense that gives you a tax break. If you paid for something during the year that helped you in your work, you may be able to subtract that expense from the total income reported on your tax return. The more expenses you can deduct, the lower your taxable income—and your overall tax bill. 5 deductible expenses you probably have: Mileage All that driving — whether it’s to deliver groceries, provide a ride, or meet with a client — adds up. But the good news is you can deduct mileage as long as the driving was for business purposes. You have two options for deducting your driving expenses: 1) You can track and calculate all your actual car expenses, like the cost of gas, maintenance, and insurance. Or 2) you can take the standard mileage deduction, which is easier to calculate and save most people more money. Whichever method you use, keep a running list of your expenses or miles in your car or make it easy on yourself and use a mileage tracking app. Medical expenses If you spend more than 7.5% of your income on medical expenses throughout the year, you may be able to deduct some of those costs at tax time. You can deduct doctor fees, hospital bills, your prescriptions, and even your monthly health insurance premiums (though these are now more affordable than ever). Learn more about deducting your health expenses  available to independent workers when it comes to saving on health insurance and medical expenses. Explore them to see what works best for you. Work supplies Supplies run the spectrum from office supplies like pens, paper, and envelopes to less obvious things like doggie poop bags for dog walkers, bottles of water for ride share drivers, or cleaning supplies for housekeepers. Simply put, anything you buy to keep your business running could be deductible. Just be aware that supplies are only deductible if used exclusively for your business, so keep your supplies (and the receipts for them) separate from your personal supplies. Cell phone As an independent worker, you’re likely using your cell phone for business. The money spent to purchase the device, as well as the cost of your service and data plans may be deductible, at least in part. Be prepared to calculate your usage since you probably use it for personal communication as well. For example, if you use your phone for business 60% percent of the time, you could deduct 60% of your phone costs as a business expense. You’ll also need to keep your bills as evidence to back up the business use, such as the number of hours spent using data. Computer, internet, and subscriptions If you use a computer and the internet for business, those expenses are deductible too. Related equipment purchases fall in this category as well, such as a keyboard, mouse, or printer. If you’re paying an internet provider, that’s a deduction too — at least in part. Software for the computer or online subscriptions used for business count too.  Again, if the computer is also used for personal needs, you’ll want to keep records to support the deduction. Deduct—and track—every expense you can! This is just the tip of the deduction iceberg, and there are many more available to independent workers. Consult a tax professional to confirm what you can deduct from your tax bill, because everyone’s circumstances are different. But no matter what, you should always keep good records for items you plan to deduct so you don’t miss anything. Every year, gig workers leave thousands of dollars on the table by not maximizing their deductions. Consider tracking your expenses throughout the year so you can save time and take advantage of cost savings! At the end of the day, deductible expenses add up and can put more money back into your pocket. Plus, when you keep more of your money, you can work toward building a savings account or splurging on something special. You work hard for your money, so don’t leave any on the table.  

Preparing for tax time and putting together the correct information can be intimidating. If you’ve never worked independently, just the words related to taxes can seem a bit unclear. Here are a few tax terms that gig and independent workers should know. Record keeping Record keeping, or bookkeeping, is the tracking of money related to your gig work. In a nutshell, record keeping involves tracking income (money coming in) and expenses (money going out for the purpose of doing business). Your income includes everything you earn from your work, so if you have multiple jobs (like waiting tables and pet sitting) or work using multiple gig apps (like Uber and Lyft), you should count it all. Other sources of income might include any interest you earn on investments or rent someone pays you to live in a property you own. Record keeping also requires tallying your work-related and subtracting that total what you’ve earned to find your true income. Tracking your expenses is also important because, as a gig worker, you can write off a lot of them to help lower your tax bill. When you write off your expenses, you’re using tax deductions. Tax Deductions Tax deductions are items that decrease the amount of income you have to pay taxes on. Many of the most common deductions for gig workers come from the expenses you pay while working, including: Mileage Health Insurance Home Office Deduction Work Supplies Travel Car Expenses Cell Phone Business Insurance Commissions or Fees Depreciation of Assets (Property, like computers, mobile phones and cars decrease in value year-after-year, which reduces the amount of the deduction) But you may also be able to deduct other things, like donations to qualifying non-profit organizations, mortgage and student loan interest, and contributions to certain kinds of savings accounts like Health Savings Accounts (HSAs) and Individual Retirement Accounts (IRAs). Tax Return These are the detailed documents that outline your income and expenses for the previous year, and they’re typically due in April of each year. Once you complete and file your tax return, you’ll know how much you owe in taxes. If you’ve paid your quarterly taxes, however, the government might owe you some of that money back, or the total amount you owe might be reduced. You won’t know which until you file your tax return. Independent and gig workers generally file a 1040 form with a supplemental form called a Schedule C. A 1040 is the form that most people fill out for their taxes, and it includes the basics about your income and expenses. Most gig workers will also need to fill out a Schedule C, which will ask for a further breakdown of your income and expenses and help you calculate any deductions you can take related to them. Along with your tax return, you may also need to include any 1099 forms you received from anyone who paid you income. If you’re a Door Dasher, for example, DoorDash may send you a 1099 that says exactly how much you earned throughout the year. Checking your 1099s can help you calculate your income for the year, but not all companies send them to all workers, so keep your own records too. If you’re not sure how to file your tax return, consider getting help from an accountant or using software like H&R Block. Tax Withholding If gig or freelance work is your side hustle and you have a full-time job too, you may need to consider how much taxes are withheld from your paycheck at your traditional job. Tax withholding is money employers hold back from employee paychecks, and it’s used to pay toward your federal and state income taxes to help you avoid a big tax bill in April. The amount withheld is based on documentation you (the employee) provide to your employer via official forms. You can request a higher amount (if you think you’ll owe taxes at the end of the year) or lower amount (if you think you’ll get a big return) be withheld. Consider increasing your withholdings at your traditional employer to offset the extra income you earn from your gig work. If you freelance full-time and don’t have a traditional employer to withhold taxes automatically, it’s helpful to set money aside each month for your estimated tax payment and pay quarterly estimated taxes. Depending on how much you earn, you may even be required to pay quarterly taxes. Estimated Quarterly Tax If you are an independent worker, you may be required to make quarterly estimated tax payments. These are payments you make four times during the year to the federal government (and possibly your state government). How much you pay is based on how much income (minus expenses) that you think you’ll earn this year as an independent worker. Many gig workers use last year’s income as a starting point when estimating this year’s income, but an accountant or state and federal online resources can help you determine what estimates, if any, to pay. The benefit of paying estimated taxes is that you may avoid penalties, reduce the likelihood of owing money at tax time and spread out your tax bill over time. Have more tax questions? Taxes for gig workers can be complicated, so consider consulting a tax professional or tax platform to help you maximize your tax savings and avoid mistakes on your tax returns. Or, if you’re ready to tackle your taxes yourself, online resources like Stride have additional tax guides for self-employed professionals here. Either way, you’re now better armed to understand the languages of taxes. Way to go!

When you’re earning income as part of the gig economy, paydays might ebb and flow. Without a steady or predictable income, planning for the future by building a financial safety net can positively impact your wellbeing. As a gig worker, you have two unique benefits — flexibility and freedom – in how and when you work. However, you may not have access to employer-sponsored savings plans for retirement or negotiated health insurance options. Still, you can find ways to take control of your finances. Planning for the future, both predictable events and unexpected hardships, is one of the best ways to achieve long-term financial stability, which may be more in reach than you think. Set Savings Goals and Tackle Debt To start building a financial safety net, consider how much money you need to get by in a typical month, including any minimum payments on outstanding debt. This number is a good goal for establishing your emergency savings – money you can pull from if needed. Save a Little at a Time Once you reach that first goal, try for saving up two months of living expenses, then three, and so on. Even if you’re only saving small amounts each month, it can make a difference over time, and every bit you save now means more peace of mind and a bigger safety net if you need it later. Pay Off Debt Once you have some savings, consider how much you can pay toward outstanding debt. While debt can seem daunting, choosing small milestones on the way to paying it down can ease the burden and help you see your progress. If you have multiple sources of debt, such as credits cards, a car payment, and student loans, choose at least one to make more than the minimum payment on if you can. A good strategy is to select the one with the highest interest rate or largest dollar amount owed. This will help you pay this debt down faster and then you can pay more toward the next account on your list. Paying off debt helps build your credit score. Making on-time payments toward your debt also helps you build credit. A high credit score is another attainable goal that will serve you well in reaching long-term financial health. Focus on the Future Finally, with emergency money saved and some debt paid off, consider saving for known future expenses, such as a vacation, a wedding, or home improvements. Having even a little money saved for these events can help you avoid taking on more debt to pay for them. With your goals in mind… how do you start saving? Create a Personal Savings Plan Now that you know how much to save and what you’re saving for, let’s talk about how you’ll get there. One popular strategy is to set up monthly automatic transfers from your income or checking account to savings or investment accounts (more on investment accounts later). But if your income fluctuates a lot, and you’re not sure how much you can save each month, mark your calendar to manually make the transfers instead. In high-revenue months or job periods, you can consider depositing extra funds into savings accounts. If you already know certain months are typically higher earning, you can plan your savings goals to match. If not, keeping records of your income could help you predict higher-income periods when you might be able to save more. The funds saved during these times might just be what you need to establish that safety net and get you through more difficult periods in the future. Put Your Long-Term Savings to Work Now, where should you put your savings? It depends on your goals and timelines. Investment accounts are best for long-term goals like retirement or saving for college down the line. That’s because investments have the potential to earn more interest and grow more significantly than savings accounts — but it might take a while to see the difference. And with some investments, it can take a little longer to get your money out when you need it. For your safety net and other short-term savings goals, consider opening a savings account with your financial institution or bank. Your money may not grow as quickly, but it’s easily accessible when you need it, and will grow more than if you kept your savings in cash. Save “Windfall” Money “Windfall” money is a lump sum of money that you receive all at once, often unexpectedly. It might be a tax refund, a bonus from a customer, a big tip or even an inheritance. If this type of money isn’t needed for your day-to-day expenses, consider placing some or all of it into savings or investment accounts. Because you weren’t expecting the extra cash, you can save without feeling like your typical cashflow is taking a hit. Use Savings Tools Take a look at rewards or savings tools you might already have. Many credit cards offer cash back as part of their customer benefits. Even if you only collect it once a year, consider putting that cash into savings for later. Check with your bank about the savings tools they might offer, such as budgeting help, high-yield savings accounts, financial guidance, and credit building tools. Keep in mind some accounts may provide you higher interest or pay dividends, but could make your money harder to access immediately, so consider how soon you may need to use your savings. Finally, check out your options for savings apps. These tools can help you set savings goals, develop better savings habits, or invest when you save, all from your smartphone. When saving is easy and convenient, you’re more likely to reach your goals faster. Once you’ve set your goals, made a plan and identified the best tools, saving can seem more attainable. Click here to download.

As a gig worker, you embrace freedom and flexibility in when, where and how you work. If you’re like a lot of independent workers though, you probably feel some level of stress without the safety net (AKA benefits) that traditional workers enjoy. For you, benefits like medical, dental, and vision might not feel accessible or affordable. While that was true in the past, times have changed. It’s now easier than ever to find, and keep, affordable benefits that aren’t tied to a traditional 9-to-5 job. These benefits, sometimes referred to as portable benefits, because you can keep them even if you switch gigs, can help you build financial stability, provide peace of mind, and allow you to keep hustling. Navigating benefits without a full-time employer For traditional employees, benefits are an important element considered when accepting or negotiating an employment offer and are usually discussed during the interview process or even included in the job listing. That’s because having access to benefits is super valuable. They offer stability, safety, and security to the employees who have them. Life happens, and these benefits are an important part of the foundation required to handle both expected and unexpected situations. But as a gig worker, you have to build a DIY benefits package. If the thought of sifting through plans on your own or figuring out your taxes yourself keep you up at night, you’re not alone. Luckily, there are ways you can get many of the benefits employers provide—and you don’t have to give up your freelance lifestyle to get them. Getting insurance without a full-time employer As the gig economy grows, so do the tools available to help you find and enroll in the insurance you need. Maybe you don’t have a full-time employer to vet health plans or help you pay for your coverage, but you have resources that can help you do both. Companies like Stride make it easy to compare health plans in your area and help determine whether you qualify for financial aid to help lower the cost of the plan you choose. They can also help you find other kinds of insurance, such as low-cost dental, vision, and life insurance, so check out your options. Paying taxes without a full-time employer Traditionally employed workers get to do less math when it comes to their taxes. That’s because their employers automatically take taxes out of their paychecks each payday. And if traditional workers have any on-the-job expenses, they submit an expense report and let the accounting department take it from there. Since you don’t have a payroll or accounting department of your own, you have to figure out what you owe in taxes. And you may have to make regular tax payments throughout the year, instead of waiting until April to settle up. The good news is, tax platforms like H&R Block can help you understand your unique tax situation, make quarterly tax payments and file your taxes each spring. Even better, there are apps like Stride that help you track your expenses throughout the year, so you can claim them when you file your taxes and lower your total tax bill. Have your benefits—and keep your gig life too. As a gig worker, you sometimes have to get creative when it comes to your finances. But that doesn’t mean you can’t get the benefits you need. You have resources available that make it a little less complicated to navigate the world of independent work, so you can enjoy the flexible lifestyle, freedom and independence with more security and less stress. Get started