Gig Economy
Quick definition
Platform-based work where workers are independent contractors paid per task. Rideshare, delivery, and similar.
The gig economy is the segment of the labor market where workers are matched to short-term tasks via a platform and paid per task. Most gig workers are independent contractors rather than W-2 employees.
Common platforms
- Rideshare: Uber, Lyft
- Delivery: DoorDash, Grubhub, Uber Eats
- Shopping: Instacart
- Logistics: Amazon Flex
- Freelance work: Upwork, Fiverr, TaskRabbit
Tax implications
Gig workers receive 1099-NEC forms (or quarterly-style 1099-K reports) and file Schedule C. They owe self-employment tax on net earnings. The mileage deduction is the single largest tax-saving lever for most gig drivers.
The undercount problem
Platform tax summaries only count miles when a passenger or order is in the vehicle. The IRS allows deduction of deadhead miles too. Most full-time gig drivers leave 30 to 50 percent of deductible mileage on the table without independent tracking.
Related terms
Independent Contractor
A worker classified as self-employed for tax purposes. Receives 1099 income instead of W-2 wages.
1099-NEC
The form payers issue to report $600+ in nonemployee compensation. If you got one, you are self-employed for IRS purposes.
Deadhead Miles
Business miles driven without a paying customer or revenue at the destination. Still deductible.
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