Latest news with #gigworkers
Wall Street Journal
22-07-2025
- Business
- Wall Street Journal
Democrats Attack Gig-Worker Benefits
Senate Democrats are breathless about Americans losing government healthcare, but they're dead set against expanding private coverage. They're attacking a plan to help gig workers get benefits—merely because unions won't get a cut. Louisiana GOP Sen. Bill Cassidy released several bills last week that would shield companies from a regulatory onslaught if they decide to offer health or retirement plans to their contract workers. Delivery drivers for Uber, Amazon and other 'gig' platforms would be able to get these benefits without the risk that courts or federal agencies would reclassify them as full employees.
Bloomberg
21-07-2025
- Automotive
- Bloomberg
Fintech OCN to Invest $150 Million for Expansion in Mexico
Mexican fintech OCN, which offers car rental models for gig workers, will invest $150 million in Mexico to help expand vehicle access for ride-hailing drivers in key cities in the country, according to a press release. The fresh capital will be deployed over the next 18 months to grow OCN's presence in Mexico City, Monterrey, Guadalajara, Tijuana, and Querétaro — some of the country's most densely populated cities. The company plans to use the investment to triple its fleet to 15,000 vehicles from 5,000, and increase its workforce to 150 from 120.
Forbes
18-07-2025
- Business
- Forbes
One Big Beautiful Bill Act Changes Form 1099 Reporting For Gig Workers And Those Who Use Payment Apps Like PayPal For Business
Gig workers will see a change in reporting. getty The One Big Beautiful Bill Act (OBBBA) was signed into law by President Donald Trump on Thursday, July 4, 2025. The new law makes permanent several of the expiring tax cuts contained in Trump's signature 2017 tax legislation—the Tax Cuts and Jobs Act (TCJA). It also changes those controversial reporting requirements for gig workers and those who use payment apps like PayPal for business. That includes the reporting thresholds for Form 1099-K (for payment card and third-party network transactions), Form 1099-MISC (for payments not covered by other 1099 forms), and Form 1099-NEC (for nonemployee compensation)—those have been changed. Under OBBBA, there are changes to the reporting thresholds for Form 1099-K (for payment card and third-party network transactions), Form 1099-MISC (for payments not covered by other 1099 forms), and Form 1099-NEC (for nonemployee compensation). Form 1099-K is used to report payments received for goods or services that are processed through payment apps (like PayPal and Zelle), online marketplaces (like eBay), and, of course, credit cards. The old reporting threshold for Form 1099-K (you can read more about that below) is now new again. OBBBA reinstates the $20,000 and 200 transactions thresholds, retroactive to 2022 (or as if the reporting changes American Rescue Plan Act of 2021 had never happened). That means that the $20,000 and 200 transactions thresholds will apply to the tax year 2025. Form 1099-MISC is used to report non-wage income like attorney payments, royalties, prizes and awards, and some rents. The reporting threshold for Form 1099-MISC will increase from $600 to $2,000, effective as of the 2026 tax year (the forms you'll receive in 2027). For tax years beginning in 2027 and after, the threshold will be adjusted for inflation. Form 1099-NEC is used to report non-employee income—those for independent contractors and gig workers. The reporting threshold for Form 1099-NEC will increase from $600 to $2,000, effective as of the 2026 tax year (the forms you'll receive in 2027). For tax years beginning in 2027 and after, the threshold will be adjusted for inflation. What Taxpayers Need To Know About Form 1099 The changes under OBBBA should mean fewer forms for taxpayers. In 2023, the IRS estimated that up to 44 million Forms 1099-K would be sent to taxpayers. (The official IRS projections, released in September 2024, suggested that the numbers were much smaller due to the delayed implementation of the $600 reporting threshold.) The U.S. Bureau of Labor Statistics reports that the number of self-employed individuals is around 16.5 million, representing approximately 10.4% of the total workforce. That doesn't necessarily translate into 16.5 million Forms 1099-NEC since some self-employed workers don't receive any forms, while others may receive multiple forms. But it's clear that changing the reporting threshold will impact millions of taxpayers. Regardless of the reporting threshold, all taxable income, including income earned through payment apps and online marketplaces, and income earned from side gigs and contracting jobs, must be reported on your tax return. Background For years, taxpayers who provided certain goods or services worth more than $600 were required to issue Form 1099-MISC. That changed slightly in 2012 with the new Form 1099-K. Form 1099-K introduced a requirement for reporting payment transactions, defined as transactions made with a payment card or through a third-party network. Payment card transactions include accepting a card—such as a gift card, credit card, or debit card—for goods or services. A third-party network transaction is one that is settled through a third-party payment network, such as PayPal. For the most part, think payment apps or online marketplaces. While the reporting threshold for Form 1099-MISC had been $600, Form 1099-K required reporting when payments totaled more than $20,000 and more than 200 transactions were settled through a third-party network. No threshold applies to payment card transactions, which include credit, debit, or stored value cards, such as gift cards. The gap between the "old" Form 1099-MISC reporting threshold of $600 and the Form 1099-K reporting threshold of $20,000 was a cause for concern for some who worried about a lack of reporting compliance. The fix from Congress in 2021 was a lower $600 threshold amount for Form 1099-K set to take effect in the 2022 tax year, meaning forms that would be distributed in early 2023. However, under pressure from business groups and an IRS that wasn't yet prepared to deal with the volume, 2022, 2023, 2024, and 2025 were treated as transitional years. For the 2025 tax year, the IRS had signaled that third-party networks, such as payment apps and online marketplaces, would issue Form 1099-K if the aggregate payments received by a payee exceeded $2,500, regardless of the number of transactions. That was a step towards the $600 threshold created under the American Rescue Plan Act of 2021 and was slated to take effect in 2026. (No threshold applies to payment card transactions—payment cards encompass credit, debit, or stored value cards, such as gift cards.) Starting in 2020, there was another change to Form 1099-MISC. The IRS brought back Form 1099-NEC, Nonemployee Compensation, to report payments of nonemployee compensation (NEC) previously reported in box 7 on Form 1099-MISC. That means that independent contractors and gig workers now receive Form 1099-NEC, not Form 1099-MISC. Form 1099-MISC is still used to report attorney payments, royalties, prizes and awards, and some rents. The reporting thresholds for both forms had been $600. (The $600 threshold has never been adjusted for inflation. However, if cost-of-living adjustments had been made each year since 1954—the year that section 6041 of the tax code was introduced—the $600 threshold would now be over $7,170.) Why Were The Form 1099-K Requirements Changed In The First Place? The change in reporting threshold for the Form 1099-K originally was increased compliance. According to the IRS, tax gap studies have consistently demonstrated that third-party income reporting significantly raises voluntary compliance with tax laws. For example, computerized document matching in the early 1980s—where the IRS matched data reported by third-party financial institutions to data reported by taxpayers—significantly reduced underreporting of dividend and interest income. And the 1987 requirement that taxpayers supply Social Security numbers for dependent children resulted in a marked difference in the numbers of dependents claimed on returns—seven million fewer dependent children were claimed than in the previous year. Forbes IRS Issues Guidance On New Deductions For Seniors, Tips, Overtime And Car Interest By Kelly Phillips Erb Forbes Questions About The New Tax Bill? Taxgirl Has Answers By Kelly Phillips Erb Forbes What The One Big Beautiful Bill Act Will Mean For You And Your Business By Kelly Phillips Erb
CNA
18-07-2025
- Business
- CNA
CNA938 Rewind - Mind Your Money - Are gig workers the new answer to manpower shortage?
As manpower shortages grow, more businesses are turning to gig workers to stay nimble. Cheryl Goh speaks to Julian Tan, Founder & CEO of FastCo, to explore how flexible talent is helping companies adapt and why more people are choosing gig work as a long-term path.
Yahoo
17-07-2025
- Business
- Yahoo
Freelance, self-employed and gig workers: Here are 5 key provisions you should know about in the new tax law
If you deliver for DoorDash or run your own freelance business, your taxes may look different under the massive new tax law that President Donald Trump signed into law on July 4. Freelance, self-employed and gig workers already juggle multiple clients and unpredictable income streams, which can add an extra layer of stress during tax season compared to a traditional W-2 job. But this time, the changes could work in your favor — as long as you know what to look for. 'There's something in here for everybody, regardless of your income class. But it's important to understand how these apply and how to use them,' says David De Jong, a tax attorney at law firm Stein Sperling. Many of the new tax laws take effect for your 2025 return, which you'll file in 2026. These updates could lower your tax bill and increase your deductions, so here's what to look for and how to make your next tax season a little smoother. 1. Lower tax rates are here to stay The income tax rates that were first introduced under the 2017 Tax Cuts and Jobs Act (TCJA) were slated to expire at the end of this year, which would have meant higher tax bills for most taxpayers. But the new law made those tax rates permanent. Tax rates before the TCJA Tax rates in effect now 10 percent 10 percent 15 percent 12 percent 25 percent 22 percent 28 percent 24 percent 33 percent 32 percent 35 percent 35 percent 39.6 percent In other words, instead of reverting to higher pre-2017 rates, lower tax rates remain in place going forward. 'These tax rates continue on an indefinite basis. I like to say indefinite rather than permanent, because nothing in law is truly permanent,' De Jong says. 'It's permanent until it's changed again.' Learn more: Current federal tax brackets and income tax rates For freelancers who often experience feast or famine cycles, this newfound tax-law stability makes it easier to plan their estimated quarterly taxes and avoid big surprises at tax time. It also means gig workers continue to keep more of each paycheck, making cash flow a little smoother throughout the year. 2. Qualified business income deduction is permanent The qualified business income (QBI) deduction lets freelancers and self-employed workers deduct up to 20 percent of qualified income. The new tax law makes this deduction permanent, or 'indefinite,' as De Jong puts it. (Before the new tax law made it permanent, this tax provision was slated to expire at the end of this year.) 'This deduction is one of the biggest benefits for self-employed individuals and can be substantial annual savings,' De Jong says. If you run a business as a sole proprietor, limited liability company (LLC), or S corporation, you likely are eligible to continue using this deduction to reduce taxable income. For example, if your QBI is $80,000, you may be able to deduct up to $16,000. This reduces the total income amount that's taxed and helps you save money each year. 3. New deduction for tip income Starting in the 2025 tax year, freelancers and gig workers who earn tips can deduct up to $25,000 in qualified tip income and up to $12,500 in qualified overtime pay. Qualified tips are those you receive directly from customers or through a tip pool, and they must be voluntary. De Jong says the specific details are not yet completely clear and more guidance from the IRS is needed. He gave the example of restaurants where the gratuity is already included on the bill. In these cases, tips may not be considered voluntary and wouldn't qualify for the deduction. However, it may qualify if a receipt says you can adjust the percentage. If you rely on tips, this deduction could significantly reduce your taxable income, but De Jong recommends watching for IRS rules to confirm which tips qualify. Keep in mind that tips and overtime pay are still subject to Social Security and Medicare tax, so these types of income aren't completely tax-free. Learn more: No tax on tips and overtime: Here's how your taxes may shrink 4. Higher 1099 reporting thresholds The new tax law increased the threshold for when 1099 forms must be issued, including the 1099-MISC and 1099-NEC, to $2,000 from $600. Also, the threshold for 1099-K forms (for payments through apps like PayPal or Venmo) has been reverted to the older rule, which allows for $20,000 and 200 transactions before reporting is required. But these new rules technically only affect the companies that issue the forms to you. 'A common misconception is that if you don't get a 1099, you don't have to report that income,' De Jong says. 'But you're still obligated to report all income you earn. The form is just a tool to help the IRS verify it.' The increased reporting threshold means you might receive fewer forms, especially if you work on multiple small projects or occasional gigs. It's still important to track and report every dollar you make to avoid risking penalties later. Get started: Match with an advisor who can help you achieve your financial goals 5. The standard deduction is higher The new tax law made two changes related to the standard deduction: The new law made permanent the much higher standard deduction that was put in place by the TCJA way back in 2017. The new law also slightly increased the standard deduction amount for 2025 to $15,750 for single filers, $23,625 for heads of household, and $31,500 for joint filers. 'The higher standard deduction makes it easier for freelancers to reduce taxable income automatically without worrying about tracking every small expense,' De Jong says. Keep in mind, though, that freelancers and small-business owners have to deal with two main types of expenses: Those that reduce their business income, and those that could be counted as itemized deductions. Every taxpayer, no matter how they earn their money, must choose between claiming the standard deduction or itemizing their deductions. That's a decision that's made on Form 1040, the main income tax form. But no matter what the standard deduction is and no matter whether you itemize or claim the standard deduction, you'll still want to reduce your freelance income by qualified business expenses. That process generally happens on Schedule C: You enter your gross business income and then reduce it by your business expenses. The result of that calculation ends up on your Form 1040, which is where you then choose whether to itemize your personal expenses or claim the standard deduction. Itemizing deductions doesn't make sense for any taxpayer without large qualified expenses, such as mortgage interest, property taxes (deductible as part of the SALT deduction), charitable contributions or medical expenses. A higher standard deduction means you can keep more of your income and makes filing simpler. Learn more: Standard deduction vs. itemized deductions: Pros, cons and how to decide Other tax perks to know about While the tax-law changes above may impact most freelancers and gig workers, the new law also includes other benefits depending on your age, family situation and other factors. Expanded child tax credit: The child tax credit has increased to $2,200 per child under age 17, and is adjusted for inflation each year. This can help reduce taxes for freelancers and gig workers with dependents. Vehicle loan interest deduction: You may be able to deduct up to $10,000 in interest on a personal auto loan if the vehicle assembly was finished in the U.S. This deduction is available from 2025 through 2028 and phases out at income of $100,000 for single filers and $200,000 for joint returns. Non-itemizer charitable deduction: Starting in 2026, there's a new charitable deduction worth up to $1,000 in cash donations if you're a single filer or up to $2,000 if you file married filing jointly — and you don't have to itemize to claim this tax benefit. New 'bonus' deduction for older taxpayers: This new bonus deduction for taxpayers aged 65 and older is worth up to $6,000 for single filers and $12,000 for those who are married filing jointly. It's in effect in 2025 and through 2028, but there are income limits. Higher cap on the state and local tax (SALT) deduction: The SALT deduction lets people who itemize their deductions write-off some of their state and local taxes, such as property taxes and state income tax. The cap on this deduction has been raised to $40,000, from $10,000, for tax years 2025 through 2029. Learn more: State tax rates: Check your state Next steps for freelancers and gig workers Here's how to prepare for tax season and make the most of these tax-law changes: Adjust your estimated quarterly payments: Your tax liability may be lower than in previous years, thanks to the new tax deductions and lower tax rates. De Jong recommends paying in four equal payments that total your prior year's tax liability to avoid penalties. If your income was higher last year, he suggests paying 110 percent of your prior year tax liability. Keep records of income and tips: Accurate records make it easier to claim deductions like the new tip income tax breaks. Good documentation also supports your case if the IRS asks for proof of your reported income. Check your state tax rules: Some states don't automatically follow federal changes. Depending on where you live, certain new deductions or rate changes may not apply to your state tax return. Review your state tax rules or consult a tax advisor to avoid surprises. Watch for IRS guidance: The IRS will clarify details on the new deductions, especially for tip and overtime pay. Staying updated helps you know what you qualify for and avoid mistakes that could lead to penalties or an audit. Bottom line While these tax changes offer valuable opportunities to save money, remember that tax rules aren't permanent. The new tax deductions for tips and overtime and vehicle loans are set to expire in 2028, unless renewed. The expanded SALT deduction cap is scheduled to revert to its lower limit in 2030. 'A lot of things get extended… 2028 is an election year, so perhaps both parties will not want to lose voters who receive tips and overtime,' De Jong says. 'Like everything else in the tax law, most provisions come and go at various points in time.' Your income level, business type and location will determine which of the new tax law's provisions apply to you. It's a good idea to work with a tax advisor who understands your freelance business and gig work. A tax advisor or certified public accountant (CPA) can help you understand which deductions you can take, track potential phaseouts and plan ahead for the next tax season. Learn more: 5 tips to find the best tax preparer for you Sign in to access your portfolio
