Things to remember ahead of tax season for gig workers
HARRISBURG, Pa. (KDKA) — From rideshare drivers to dog walkers, gig workers are everywhere these days.
One study from a few years ago found that they earn more in Pennsylvania than anywhere else in America. So, what is the situation now?
"I would just say it's someone who capitalizes on opportunities," Uber driver Kyra Faust said.
Faust has a business degree and used to have a 9-to-5 job, but not anymore.
"When I actually went on maternity leave with my son nine years ago, I tried baking and I said, 'Hey, this is for me."
Faust is one of many Pennsylvanians who were earning more each year from side hustles than people anywhere else in America, according to a 2017 study by Finder.
What are the updated numbers? KDKA-TV didn't hear back from Finder, while Pennsylvania and U.S. government statisticians don't have recent data either.
KDKA-TV's Seth Kaplan: "What is a gig worker?"
Karl Kever: "That's an excellent question. And that's one that researchers are definitely grappling with constantly."
Kever, a regional economist for the U.S. Bureau of Labor Statistics, said that's one reason the data is so hard to get. Some examples of side hustles are obvious.
"Ride-sharing, transportation providers, food delivery services, dog walking," he said. "But in reality, gig work can really be anything that brings worksite income in addition to your main or primary job."
"Gig work isn't new at all," Kever added.
A shoe shiner 100 years ago was a gig worker. So what is new?
"It's different in that we have the tracking capability now to show every single job that you're working," said Bryan Menk, a professor at Duquesne University.
Menk, a certified public accountant and a professor, said it's always been every worker's responsibility to pay their taxes.
"Shoe shiner, what you get paid in cash, nobody's been able to track that," he said. "However, if you're using Venmo, PayPal, the IRS can and will track those.
What most of them won't do is withhold taxes for you.
"You need to start saving between 30 and 40 percent of each check," Menk said.
"Take every tip you get, take everything that you are getting, and put it aside for that tax bill," he added.
Self-employed people actually have to pay double what regular employees pay in Social Security and Medicare taxes. On the other hand, you might be able to deduct some expenses you haven't thought of, like interest on a car loan. Click here for more.