The Individual Income Tax due date has changed from April 15 to May 17, 2021.
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Those who earn their living from temporary or part-time jobs may struggle with understanding what to do about taxes.
Gig workers, also known as independent contractors, often earn their income through digital platforms, like an app or website. They can include musicians, writers, tradespeople, consultants, ride-hailing drivers, and those who provide rental services or goods.
The South Carolina Department of Revenue (SCDOR) reminds gig workers you still must report your gig income on a tax return, even if you are paid in cash or goods and may not receive a W-2 or 1099.
Examples of gig work include:
- Driving a car for booked rides or deliveries
- Renting out property
- Selling goods online
- Providing creative or professional services
Note: This list does not include all types of gig work.
According to the IRS, gig workers are generally required to pay:
- Income taxes
- Federal Insurance Contribution Act or Self-employment Contribution Act tax
- Additional Medicare taxes
Here are some tax tips for gig workers:
- Keep good records of business expenses and income. Deductions can lower your tax bill, but they must be supported by records. Double check the rules for deducting expenses related to use of things like your car or house.
- Gig economy workers who have another job where their employer withholds taxes from their paycheck can fill out and submit a new Form W-4. Do this to request withholding additional taxes from your paycheck to help cover your gig work.
- If your gig work is your primary income, you should make quarterly estimated tax payments. You do this to pay your taxes and any self-employment taxes owed throughout the year. Failing to make quarterly payments can mean a big bill that you cannot afford and could generate penalties and interest.
Also, for those earning income from rental property, the IRS reminds taxpayers that such income is fully taxable and special rules apply to rental property also used as a residence.
Other filing tips to keep in mind for South Carolina returns:
- Choose online filing and direct deposit for fast and accurate transactions.
- When submitting your tax return, make sure your current mailing address is included, even if you're choosing direct deposit for your refund.
- File for free using SC Fillable Forms or other free online services for which you may qualify at dor.sc.gov/iit-filing.
For more information about gig economy, visit IRS.gov. Connect with the SCDOR on Facebook and Twitter for up-to-date news and announcements.