Tax Deductions for Gig Workers

It’s close to tax filing time, and it’s not too late to make sure you have deducted all your eligible business expenses if you’re a gig worker.

First, a disclaimer: I’m not a tax expert, so I have one do my taxes. This post is based on advice from Senior Editor Rocky Mengle at Kiplinger, a trusted financial advice resource since 1920. You should confirm your tax deductions with the IRS or a tax professional.

Home Office Deductions

First, Kiplinger says, be sure you qualify for home office deductions in the first place. You must be self-employed and use your home office space for business functions. You don’t qualify if you’re classified as an employee working from home. But if you have a side gig in addition to your regular job, you can deduct expenses for the side gig as a self-employed person.

Kiplinger says “The key to the home office deduction is to use part of your home “regularly and exclusively” as your principal place of business. If you only work from home for part of the year, you can only claim the deduction for the period that you can satisfy the “regularly and exclusively” requirements.”

It’s important that you use the space exclusively for business. It doesn’t have to be an entire room, but it does have to be separate and identifiable as a working space. If you have a desk in your guest room, you can deduct the equipment on it. But you can’t deduct the whole guest room space, because your mom stays there as a guest for a couple of weeks a month.

You’ll also have to be ready to prove that the space is used “as your principal place of business for your trade or business, and used to “meet or deal with your patients, clients, or customers in the normal course of your trade or business.” (That includes phone calls and Zoom; technology means there’s no need to actually bring people into your home to meet with them.

Here are some of the other business expenses you can deduct:

  • Technology used for business, including computers, printers, cell phones, and tablets
  • Software, including Office, virus protection, collaboration, accounting, and productivity software
  • Office and other supplies for doing business
  • Subscription that are essential to your business, like industry publications
  • Professional association dues, conferences, or meeting expenses
  • Mileage going to perform your business or meet with prospects or clients; also a pro-rated part of your auto insurance based on how much you use your vehicle for business

Here’s a great tax guide for gig workers from Forbes for more advice.

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