As a gig worker, you’re considered an independent contractor… and that’s great news when it comes to taxes!
It means that you can write off a lot of your everyday expenses at tax time. Unfortunately, many people forget to keep track these write offs and end up overpaying taxes. At Gigworker, our mission is to make it easy to make sure you never miss a tax write off and keep as much of your hard-earned cash as you can.
The team at Keeper ran a study to uncover which tax write offs were most often missed.
They reviewed tax returns for 205 gig workers across different industries to discover exactly what write offs people were missing most often and how much money they were leaving on the table.
On average, study participants overpaid on taxes by a whopping 21%. That’s a lot of money!
Your phone bill
It would be hard to do much of anything in today’s world without your phone. Whether you’re an Uber driver, Airbnb host, or a consultant, you always need your phone charged and handy to take ride requests, book guest reservations, respond to client emails, and—let’s not forget—make phone calls.
You need it to earn the money, so don’t forget to include it as a tax deduction. With automated tax platforms like FreeTaxUSA, it is simple for you by calling out deductible expenses including your phone payments.
23% of gig workers included in the study forgot to claim their phone bills and paid an average of $112 more than they needed to in taxes.
Apps, services, and online fees
Just because you can’t see or hold it, doesn’t mean you won’t see tax savings by remembering to deduct the cost of the software you use as a gig worker. Apps like Photoshop or cloud storage like Google Drive that you use for your work are partially deductible.
It might be obvious that a photographer or graphic designer would have deductible software, but so do many other 1099 contractors. Partially deductible software includes apps or services to plan travel, invoice clients, keep in touch with guests or passengers, or track your earnings to boot. Even the cost of Keeper is a write off!
In our study, 21% of people didn’t include software when they filed their taxes. On average, they would have saved $36 had they remembered.
Car insurance payments
Many gig workers opt to track the miles they drive and apply the standard mileage rate from the IRS rather than keep track of their actual car expenses.
It might seem more simple to just count up the number of miles, but with mileage tracking apps, you can let the technology help you track your car expenses and you might find that you can save a lot more by deducting your true costs rather than the estimate based on miles.
The cost of gas is only part of what it costs to drive your car. Car insurance was the third most commonly missed deduction among the gig workers in our study. It’s not just insurance; you put a lot more money into your car than you might realize tracking expenses will help you track all of your auto expenses.
You don’t have to be an Uber driver to write off car expenses. Real estate agents, photographers, Lime scooter chargers, and event planners all typically use a car for work and can save money when deducting insurance and other auto expenses.
19% of the returns we reviewed forgot to include car insurance. This oversight was the most costly of the big six, costing workers an average of $154 in overpaid taxes.
Lunch with a coworker or client
The cost of meals might not be something that many gig workers think about. A real estate agent having lunch with a client might seem like an obviously deductible expense, but the IRS will also let you deduct the cost of meals where you discuss what you do with possible referrals or talk about the industry with other workers.
Uber will pay drivers a bounty for recruiting new drivers, so if you get lunch with a friend to discuss the possibility of her becoming a driver too, then that counts as a tax deductible expense.
If you get together with other Airbnb hosts to share secrets of great hosting—that’s an industry conversation and that means it’s a write off.
Of our 205 gig workers, 16% didn’t include their eligible meal costs in their deductions, leaving an average of $77 on the table. You don’t need to leave the IRS a tip!
Buying a new phone
Laptops, cell phones, speakers, TVs, cameras, and many more electronics devices are being used by gig workers and 1099 contractors of all kinds.
If you or your guests, passengers, clients, or customers use the gadget, then it’s a partially deductible. Don’t forget the little things! Cables, chargers, cases, and other electronic accessories can all be part of how you earn your money and should be factored in when you file your taxes.
14% of workers let new device purchases go unaccounted for at tax time and that cost them an average of $123. That kind of money will go a long way toward a new phone or pair of headphones!
Traveling out of town
You don’t have to wear a suit or fly first class to have deductible travel expenses. If you have to stay overnight while you’re working, those expenses count.
Workers who can include travel costs when filing their taxes might include a photographer flying to a destination wedding, a video game journalist reporting on location, a model taking the train to a runway show, or a voice actor performing out of state.
According to the Keeper study, 11% of you missed travel expenses on your taxes. Forgotten travel expenses cost workers an average of $81.
In 2020, don’t forget to track these tax write offs! It’s free money. If you’re bad at remembering to track your expenses, we built Keeper for you!