Posted by ABLE Tax Resolution

Gig Economy Taxes - What Are They?

Gig Economy Taxes - What Are They?

The meaning of Gig economy is that companies prefer to hire employees on a temporary contract and for a temporary period instead of hiring them permanently. Gig economy does not want its employees to work in a single company for their entire lifetime and it wants people to work on a temporary contract.  

All over the world, gig economy is very famous because there are many people who wish to work part time and gain expertise in their field before moving on to something big. Some of the examples of gig economy are Airbnb and uber. 

More examples of gig economy include part time teachers who work in colleges and schools on a temporary basis and contract. These people believe in making their name and gaining expertise through this and once they have gotten the experience they move towards something else. 

United states of America as a leader in the gig economy

If we take a look at th United States of America it definitely comes under the heading of gig economy. Majority of the people of the states work in the gig economy. People over there prefer to work in the gig economy as they believe it has great advantages for them.  

One more example of gig economy is working from home. Nowadays, it is getting increasingly popular to work from home. Social media has given a great chance to people to work from their home. These home based jobs are based on temporary contracts and are not long term bu they fall under the category of gig economy. 

There are approximately 59 million freelancers who work from home in the united states of America. The amount of money that these freelancers earn contribute 1.6 trillion dollars to the economy of states every year which is huge. This figure is also expected to risen up and increase with 2.6 percent each year. 

How do taxes work in the gig economy?

It is true that there are step by step instructions to pay taxes when you are in the gig economy. First, you are asked some questions regarding tax and you have to answer them after which you can proceed further in the site. They even offer you a lot of help in many ways. After you are done with the question and answer session, they will have a look at the errors and help you to file them. The good thing is that you do not have to pay till that time so you have a lot of chance to try before you buy. 

For every tax preparation service, there is a unique kind of help available. The more you pay for a particular application, the more detailed will be the help that you will get. In order to get more details and information regarding this, you can also hire a financial advisor or a tax accountant to do the job for you. 

The bottom line

Well, this was all there was about the gig economy. Gig economy on the whole is a great advantage even for the new comers and the fresh graduates. If it is for the full time job, companies are reluctant in to hiring fresh graduates as they do not have any experience. This can be a great drawback for the fresh graduates as then, there will be absolutely no one who would hire these young and new graduates. 

Due to the gig economy being so popular, companies do hire fresh graduates and give them a chance to show their skills. This is an advantage both for the employee as he will be able to show his skills as well as get experience. The advantage to the company can also be great in the sense that new comers will bring in new ideas bring more innovation to the company. This also means that the new comers will work for half the salary that the company would have to pay to the experienced ones. 

It is true that there are many advantages of the gig economy. However, there a few drawbacks also. The drawbacks can be defined as the fact that not everyone wishes to work on a temporary basis. Most of the people prefer working in a company for their entire lifetime. 

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