As a gig worker, you're not only your own boss but also your own bookkeeper. In a continuation of our series on taxes, we take some time to highlight the most common expenses that can reduce your tax bill.

As we always say it’s much easier to track these as you go throughout the year than scramble during tax season to find everything you need. You’ll inevitably overpay your taxes, leaving valuable savings on the table.

The easiest way to do this is to use an automated tax calculator and expense tool. Mymo offers this out of the box, with automated mileage calculation, simple expense tracking and real-time household tax estimates.

By taking advantage of deductions, you can significantly reduce your tax liability and keep more of your hard-earned money in your pocket. Here are some of the most common tax deductions every gig worker should know about.

1. Vehicle Expenses: If you use your vehicle for work, such as driving for a rideshare service or making deliveries, you can deduct a portion of your vehicle expenses. This includes gas, maintenance, repairs, insurance, and depreciation. You can either track your actual expenses or use the standard mileage rate set by the IRS.
   
   The standard mileage rate is a simplified method that allows you to deduct a set amount per mile driven for work (67 cents per mile in 2024). This rate encompasses all vehicle-related expenses, including gas, maintenance, and depreciation. This is typically best for drivers with low maintenance cost who put a lot of miles on their car.
   
   Alternatively, you can track your actual expenses, such as gas, repairs, and insurance, and deduct the portion attributable to your rideshare work. This method requires more record-keeping but may result in a higher deduction if your actual expenses exceed the standard mileage rate.
   
   To determine which method is best for you, consider your driving habits, vehicle type, and recordkeeping preferences. If you choose the standard mileage rate in the first year your vehicle is available for use in your business, you must continue using that method for the life of the vehicle. However, if you start with the actual expense method, you can switch to the standard mileage rate in a later year.
   
2. Home Office Deduction: If you use a portion of your home exclusively for work, you may be eligible for the home office deduction. This allows you to deduct a percentage of your rent, mortgage interest, utilities, and other home-related expenses based on the size of your workspace.
3. Self-Employment Tax Deduction: As a gig worker, you're responsible for paying self-employment taxes, which include Social Security and Medicare taxes. However, you can deduct half of these taxes on your income tax return, reducing your overall tax liability.
4. Health Insurance Premiums: If you're self-employed and pay for your own health insurance, you can deduct the cost of your premiums on your tax return. This includes dental and long-term care insurance premiums as well.
5. Supplies and Equipment: Any supplies or equipment you purchase for your gig work, such as a laptop, software, or tools, can be deducted as a business expense. This also includes any subscriptions or memberships related to your work.
6. Advertising and Marketing: If you spend money on advertising or marketing your gig services, such as business cards, flyers, or online ads, these expenses are tax-deductible.
7. Education and Training: Any education or training expenses related to your gig work can be deducted. This includes courses, workshops, conferences, and books that help you improve your skills or knowledge in your field.
8. Retirement Contributions: As a gig worker, you're eligible to contribute to a self-employed retirement plan, such as a Solo 401(k) or SEP IRA. These contributions are tax-deductible and can help you save for the future while reducing your current tax bill.

The bottom line
As a gig worker, it's essential to stay on top of your finances and take advantage of every tax deduction available to you. By keeping accurate records and understanding the deductions you're eligible for, you can minimize your tax liability and maximize your take-home pay. Remember, every dollar saved on taxes is another dollar invested in your success as a gig worker.