The Gig Economy and Paying Too Much Tax

The Gig Economy and Paying Too Much Tax

Gig economy workers say they haven’t claimed deductions related to their independent contractor work!

That’s according to a survey by TaxSlayer, a maker of professional and consumer tax software. The survey also shows that the gig economy is booming: Nearly three in ten Americans (28 percent) have two or more sources of income to report to the IRS. Of those who work multiple jobs, 38 percent say they do it to supplement their income, 23 percent like the flexibility and 21 percent are holding the job to make ends meet.

Yet, according to that same survey, 40 percent of respondents shared that they do not take deductions related to independent or gig work. These individuals may be paying thousands more in taxes than they need to be.

Of these various workers, over a third (33%) choose to file their taxes in February. However, 17 percent wait until April to start filing. If you already filed your return and you missed out on deductions that could have reduced taxes is it too late? NO!

Although the normal tax deadline/s are in the past, you can still claim deductions you might have missed. There are a few ways to do this:

1) If you already filed your taxes, you can file an amended return. Some tax software systems do this, but you really should get the advice of a tax pro before going in and doing a second surgery on your taxes.

2) If you filed a request for an automatic 6 month extension, you’ve got until October to complete your 1040 return.

3) If you haven’t filed your taxes (or an extension) yet, all is not lost. See your CPA as soon as you can. You will likely face a late fee and some interest if you owed taxes (but the interest won’t be high yet. And, if the tax pro finds deductions you might have missed on your own, your tax situation won’t be as bad as you’re worrying about. No matter the case, it’s better to file late, than start fearing the IRS.

Kate Smith CPA, PLLC offers tax return reviews of previously filed returns for as low as $50. Bring yours in today to see what deductions you may have missed!

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