11 things every gig worker should know for 2025 and 2026.

Brief, IRS-cited tips. Current for tax year 2025 (filed by April 15, 2026, or by October 15 if you extended) and tax year 2026 (the planning year). Read each in a minute. Save them in your pocket.

• Tip 01

  Track every business mile

  The biggest deduction most gig drivers get

  • The IRS pays you per business mile: 70 cents in 2025, 72.5 cents in 2026.
  • At 18,000 business miles, that's $12,600 you can write off in 2025, or $13,050 in 2026.
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  IRS Pub 463 Ch. 4 · IRS Notice 2025-3 (2025 rate)

• Tip 02

  Save 25 to 30 percent of every payout

  You owe both self-employment tax and regular income tax. Plan for both.

  • Self-employment tax is 15.3 percent of your profit (12.4 percent Social Security plus 2.9 percent Medicare).
  • Federal income tax adds another 10 to 24 percent on top. California adds 1 to 9.3 percent for most gig drivers.
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  IRC §1401 · IRS Pub 505

• Tip 03

  File Schedule C if you net 400 dollars or more

  Threshold is low. You file with or without a 1099.

  • Schedule C is the IRS form for self-employed income. Schedule SE is for the Social Security and Medicare tax on it.
  • Both attach to your regular Form 1040. The $400 threshold has been the law since 1990.
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  IRC §1402(b) · Schedule SE instructions

• Tip 04

  Cash tips count as income

  Every dollar goes on Schedule C line 1, with or without a 1099

  • Platforms report what they paid you on a 1099-NEC. Cash tips are separate.
  • Add cash tips to your platform income before filing.
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  IRC §61 · Schedule C instructions Line 1

• Tip 05

  Pay quarterly when you expect to owe 1000 dollars or more

  Four due dates a year, not evenly spaced. Pay via Form 1040-ES.

  • For tax year 2026: April 15 (Q1, already past). June 16 (Q2). September 15 (Q3). January 15, 2027 (Q4).
  • Pay at irs.gov/payments using IRS Direct Pay.
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  IRC §6654 · IRS Form 1040-ES (2026)

• Tip 06

  Half of self employment tax is deductible

  The IRS lets you deduct half of your self-employment tax.

  • Self-employment tax has two halves. When you're a W-2 worker, your employer pays one half. As a gig worker, you pay both, but the IRS lets you deduct that 'employer half' against your income tax.
  • On $33,000 of net profit, your SE tax is $4,663 and the deduction is $2,332.
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  IRC §164(f) · Schedule 1 line 15

• Tip 07

  Home office only counts when use is regular and exclusive

  Most rideshare and delivery drivers do not qualify

  • The space has to be used only for work. It cannot also be a guest room, kitchen, or family space.
  • $5 per square foot, up to 300 square feet. Same in 2025 and 2026.
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  IRC §280A(c)(1) · IRS Pub 587

• Tip 08

  Year one mileage choice locks the vehicle in

  Pick standard mileage in year one or never get it on that car again

  • Standard mileage is one number per mile. It covers gas, repairs, insurance, maintenance, and depreciation, all bundled.
  • The alternative is 'actual': you save every gas receipt, every oil change, every repair, and depreciate the car over six years. Hard to do, and only a bigger deduction for expensive new cars.
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  IRS Pub 463 Ch. 4 · IRS Pub 946 Ch. 1

• Tip 09

  Section 179 lets you fully expense business gear in year one

  Up to $1.25M in 2025; up to $2.5M in 2026 after OBBBA. Phone, laptop, dash cam, hot bag.

  • The gear has to be used more than half the time for your gig work. The dollar limits are huge ($3.13M in 2025, $4M in 2026), so this never bites solo drivers.
  • You claim Section 179 on Form 4562 with your return.
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  IRC §179 · IRS Rev Proc 2024-40 (2025 limit)

• Tip 10

  OBBBA brought back 100 percent bonus depreciation

  Vehicles and equipment placed in service after January 19 2025 get full year-one write-off

  • Before July 4, 2025, bonus depreciation was shrinking each year: 60 percent in 2024, 40 percent in 2025.
  • OBBBA (the bill Congress passed on July 4, 2025) made 100 percent bonus permanent for anything placed in service after January 19, 2025.
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  IRC §168(k) · OBBBA / P.L. 119-21 §70301

• Tip 11

  A 1099-NEC over 600 dollars triggers self employment tax

  If you earned $600+ from any one platform, you'll get a 1099 and owe self-employment tax.

  • Each platform sends you its own 1099-NEC. Add up all of them as your gross income on Schedule C.
  • After expenses, what's left becomes your self-employment income on Schedule SE.
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  IRC §6041A · IRC §1402

Note. General information, not tax advice. Tips reflect federal law and California rules where noted, current as of May 2026. For advice specific to your situation, consult a licensed CPA or Enrolled Agent. Sourdough Tax, Inc. is not your tax advisor unless we have explicitly accepted that engagement in writing.