Is Gig Work Right For You?

Nontraditional working arrangements are becoming increasingly common. By 2027, gig work is expected to represent 50% of the overall U.S. economy, according to Rallyware, a provider of sales-enhancement software solutions. If you’re not part of the gig economy yet — or you’d like to increase your current gig work — a systematic approach can improve your chance of success.

The Basics

The term “gig economy” (also called the “sharing economy”) has been used to describe the use of freelancers, contract workers, consultants and part-timers participating across various professions and industries. It includes more than drivers transporting passengers or delivering food. Gig work can also be performed by IT personnel, physicians, attorneys and manufacturing workers.

Typically, gig workers don’t receive regular wages like a salaried employee. They may be paid a flat fee or an amount that’s based on output or a contractual formula. Gig jobs generally offer workers more flexibility than traditional 9-to-5 positions. Plus, businesses can accomplish their goals without making long-term commitments or providing the same benefits to these workers as they do for most employees.

4 Tips

How do you land gig work? Finding projects that suit your skills, interests and financial needs requires a methodical approach, similar to interviewing for a traditional job. Consider the following four suggestions:

1. Identify a specific target market. Decide on the industry or profession you want to work in, then research any special qualifications, degrees or other licensing requirements. Most gig workers leverage their existing skills, education and work experience.

If there are gaps in your current skill set, you’ll need to invest in some additional training, which could delay the start of gig work. However, taking odd jobs while you’re developing the requisite skills can provide on-the-job training and access to people in your target market. These can be valuable when your training is officially complete.

2. Build your portfolio. People who hire gig workers will likely want to see examples of your past work. For example, a freelance writer might provide writing samples, or a carpenter might post photos on social media that showcase recent building projects. Likewise, references, recommendations and customer testimonials can help sell you as a gig worker. Each time you complete a project, ask for a referral.

3. Use online job boards and apps. Search online job boards that relate to your target market and browse them often. Some fields also have apps that connect gig workers to consumers or companies looking for help. With online job boards and apps, you’ll need to set up an account and create a profile that details your work experience, education, skills and other relevant information, including projects that showcase your abilities. You can “share the wealth” with others by posting available opportunities on online forums.

4. Network. Old-fashioned networking is another great way to plug into the gig economy. For instance, you might attend conventions, jobs fairs and other special events designed to match up employees with freelancers. Stay in touch with important contacts in your industry or profession. Also try to become involved in community affairs so your name becomes well-known locally.

Look Before You Leap

The gig economy can provide a reliable source of income while giving workers greater flexibility than a 9-to-5 job. But it’s not without downsides and risks.

Notably, gig workers generally aren’t entitled to all the benefits that may be available to regular employees. For example, you may need to provide your own health insurance and set up and fund your own retirement savings account. In addition, you’ll need to manage various administrative tasks, such as IT support, marketing and tax filing.

Taxes on Gig Work

Under IRS rules, you must file a tax return if you have net earnings (meaning earnings minus allowable deductions) of $400 or more from gig work, whether paid in cash, property, goods or cryptocurrency. Gig workers are treated as self-employed individuals for federal tax purposes and must report taxable income from jobs on Schedule C of their federal income tax return. This will reflect information on 1099s you receive from the companies that use your services. However, you must report the income from gig work even if you don’t receive 1099 forms.

Self-employed individuals also must pay 15.3% self-employment tax. This tax covers Social Security (12.4%) and Medicare (2.9%) taxes. In contrast, when you work as an employee, you’re only charged half of the self-employment tax amount. Your employer pays the remainder. Although self-employed individuals pay the entire amount, they’re allowed to deduct only half of their self-employment tax.

The U.S. tax system is considered a “pay as you go” proposition. So, you’ll probably have to make estimated tax payments each quarter. Estimates should include both federal income tax and self-employment taxes, and they’re generally due on April 15, June 15, and September 15 of the current year, and January 15 of the following year. Alternatively, if you only do gig work on the side, you can increase tax withholding from your regular employer to make up the shortfall. If you don’t pay enough taxes on gig work throughout the tax year, you’ll generally owe penalties on top of having to pay your tax obligation when you file (or extend) your return.

Fortunately, there are tax bonuses to doing gig work: Self-employed individuals can deduct “ordinary and necessary” business expenses to offset some taxable income. Plus, you may be entitled to a home office deduction and the qualified business income deduction of up to 20% of your self-employment income. There are other tax ramifications, so consult with your professional tax advisor to ensure you’re following all the rules and maximizing the potential tax breaks.

You also might need to buy insurance and take other precautions to protect against potential liability risks from gig work.

Ready, Set, Gig

Before diving into the gig economy head-first, it’s important to weigh the pros and cons. Many people test the waters by using gig work to supplement wages from full-time jobs. Contact your professional advisors to discuss whether gig work is right for you.

Copyright 2025

This article appeared in Walz Group’s January 6, 2025 issue of The Bottom Line e-newsletter, produced by TopLine Content Marketing. This content is for informational purposes only.