Tax Planning
Gig Economy Workers & Tax Reporting: Key Updates From the One, Big, Beautiful Bill
Gig workers have new incentives, reporting thresholds, and deductions starting 2025 under the OBBA; here’s what those working via platforms need to know.
By NomadicTax Research Team • 5-8 min read • August 18, 2026
## What’s New for Gig Economy Workers
Under the **One, Big, Beautiful Bill (OBBA)**, several important tax rules changed beginning the 2025 tax year (and carry into 2026). ([irs.gov](https://www.irs.gov/newsroom/filing-tips-and-updates-for-gig-economy-workers?utm_source=openai))
### New Deduction for Qualified Tips
- **Employees and self-employed gig workers** in occupations that customarily receive tips (e.g. servers, bartenders, salon workers, ride-share drivers) may deduct **qualified tips** up to **$25,000 per return** from taxable income, for 2025–2028. Self-employed individuals are limited by net income from trade or business. ([irs.gov](https://www.irs.gov/newsroom/filing-tips-and-updates-for-gig-economy-workers?utm_source=openai))
### 1099-K & Reporting Thresholds Restored
- For 2025 and onwards, the old rule applies: you receive a Form 1099-K only if **payments exceed $20,000 AND you have more than 200 transactions**. ([irs.gov](https://www.irs.gov/newsroom/filing-tips-and-updates-for-gig-economy-workers?utm_source=openai))
- Even without a 1099-K, **all income** must be reported—forms or not. Keep your records. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/manage-taxes-for-your-gig-work?utm_source=openai))
### Bonus (100%) Depreciation & Business Equipment
- Equipment like computers, vehicles, other qualifying business property bought and placed in service **after Jan 19, 2025** may be eligible for **100% bonus depreciation** in year one. Great news if you’re upgrading gear. ([irs.gov](https://www.irs.gov/newsroom/filing-tips-and-updates-for-gig-economy-workers?utm_source=openai))
## Recordkeeping & Estimated Tax
- Keep **receipts & logs** for expenses, mileage, tips, etc.; those back up deductions.
- If you’re self-employed, estimated taxes are due April 15, June 15, September 15, and January 15. Not meeting those could lead to penalties. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/manage-taxes-for-your-gig-work?utm_source=openai))
## Example: Ride-Share Driver
> Jamal earns $30,000 from app rides, $10,000 in tips, and buys a new laptop for $2,500 and uses it at least 50% of time for work. Under OBBA rules:
> - He may deduct **$10,000 of tips** (qualified tips) up to his net earnings, limited by the $25,000 cap.
> - His laptop cost could be fully deducted via bonus depreciation.
> - He reports all income (rides + tips). If he doesn’t receive 1099-K (say 100 rides), he still reports every cent.
## Best Practices
1. Track both **transaction count & gross receipts** so you know whether or not 1099-K applies.
2. Separate personal vs. business expenses clearly (especially for equipment, vehicle use, home office).
3. Use bookkeeping apps tailored for gig‐workers.
4. Plan purchases near year‐end if thinking depreciation or new equipment might significantly reduce tax.
5. Review latest IRS guidance, especially notices and tax tips like **2026-26**. ([irs.gov](https://www.irs.gov/newsroom/filing-tips-and-updates-for-gig-economy-workers?utm_source=openai))
With many OBBA changes already in force, gig workers should be proactive—not reactive—in planning expenses and reporting income to avoid surprises come tax time.