It’s that time of the year again! With the holiday season behind you and tax season looming on the horizon, cheer and joy are the last things on your mind. No one likes filing their tax returns. Based on a 2020 LendingTree survey, 54% of Americans positively dread it.
For people working in the gig economy, filing taxes is more convoluted than traditional employees. If you’ve been a gig worker for less than a year and earned more than $400, you’re liable to file a tax return. If you’ve been one for a while and diligently file your taxes every year, paying estimated taxes every quarter and tracking your income and expenses is part of the job.
A Gallup study says that 36% of workers in the USA rely on the Gig Economy in some capacity. The IRS even launched the Gig Economy Tax Center last year to help independent contractors comply with the federal tax code. But with the pandemic showing no signs of slowing down, you might want to opt for contactless ways to file your returns this year. This means opting to e-file (electronic file) your returns and avoiding in-person Volunteer Income Tax Assistance programs or filing paper tax returns by mail. The good news is that e-filing and direct deposit are the fastest ways to get a refund.
If you’ve never filed your gig income taxes online, this article will provide you with a place to start.
Contactless Ways for Filing Taxes
Depending on whether you plan to file the return yourself or seek professional help, there are two ways to e-file your returns.
Self-filing using IRS Free File
If you’re looking to file your return, this option is secure and costs nothing. These forms are electronic versions of the paper forms used to file returns. Based on your income, you can choose one of the following options:
Traditional Free File
The Traditional Free File is a partnership between the IRS and industry leaders providing tax filing software. For an adjusted gross income (AGI) of up to $72000, you can use free online tax preparation products on IRS partner sites to file your returns.
You can browse through available offers on the IRS site. Alternatively, the IRS Free File Lookup Tool takes you through a short questionnaire and helps you find suitable offers. The software uses straightforward questions to guide you through the tax preparation and takes care of calculations. The tools are easy to use and can simplify the filing of your returns. Some even allow you to file state taxes for free. H&R Block and TurboTax are some popular e-filing options that provide intuitive and user-friendly interfaces.
Free File Fillable Forms
If your AGI exceeds $72000, you can file your returns by filling these free electronic federal forms. Choose the form you need, enter tax information, electronically sign, file, and print your return.
The downside is that guidance is limited, and the form doesn’t provide a lot of error checking. The IRS recommends this method only for those who know how to prepare their returns. If you’re comfortable filing paper returns, you should not have much trouble filling these forms. This option doesn’t allow you to file state taxes.
Using Authorized e-File Providers
If self-filing is not for you and you’d prefer to have someone else handle it, the IRS provides a list of authorized e-file providers who will take care of your returns for a fee. Just enter your zip code or select a state in the search tool for e-file providers to get a list of businesses near you with information about contact details and services.
Some providers have introduced contactless tax preparation services to enable customers to securely share the documentation required for e-filing their returns online. The team at the provider’s end will then use this information to prepare your tax returns. You can get in touch with providers and choose one that provides this option. To safeguard against identity theft, understand how your personal information will be shared, stored, and accessed.
Conclusion
E-filing your gig income taxes is recommended for a contactless experience during the pandemic. What method you choose depends on whether you want to self-file or use a professional. Self-filing is free and, with the help of IRS partner products, can be simpler if your income does not exceed $72000. But it still requires some work on your part. Using an authorized e-file provider comes at a cost. But it saves time and effort associated with filing a return yourself. With a little research, you can find an option that works for you and keeps you and your family safe.
