4 Tax Deductions Side Gig Workers Can’t Afford To Miss

Core Insights - Side gigs can be profitable for many Americans but come with tax complexities that require proper planning and understanding of deductions available to freelancers and gig workers [1] Group 1: Tax Deductions for Gig Workers - The Home Office Deduction is significantly underclaimed, with only an estimated 15% of eligible sole proprietors taking advantage of it, despite many working primarily from home [3] - Freelancers often miss or underclaim the home office deduction due to perceived risks, but it is legitimate if a specific area is used exclusively for business [4] - A general guideline suggests deducting between 8% and 15% of housing expenses, which can result in substantial savings depending on the city [4][5] Group 2: Vehicle and Mileage Deductions - Vehicle use is a valuable deduction for gig workers, especially for those who drive frequently, such as Uber and DoorDash drivers, who may overlook thousands of deductible miles [6] - Many freelancers fail to log business miles accurately, often confusing personal and business use, which can lead to mistakes in deductions [7] - It is important to choose between the standard mileage rate and actual expenses, as both cannot be used simultaneously [7] Group 3: Software and Digital Tools Deductions - Many freelancers neglect to deduct costs associated with software and digital tools that are essential for their work, despite these being eligible for deductions [8] - Business-related subscriptions and educational expenses related to digital tools like Canva, Zoom, and QuickBooks can also be deducted [8]