Tax Planning
How Gig Economy Workers Can Maximize Deductions Under U.S. OBBB Law
Under the One, Big, Beautiful Bill (OBBB), gig workers can now claim substantial new deductions and deductions—here’s how to make the most of them in 2026.
By NomadicTax Research Team • 5-8 min read • June 21, 2026
## What the OBBB Means for Gig Workers in 2026
Several provisions of the One, Big, Beautiful Bill (passed July 4, 2025) take effect or are clarified for tax year 2025 onward, offering new opportunities for **gig economy workers**. Key changes include:
- **No Tax on Tips Deduction**: Eligible workers may deduct up to **$25,000** in qualified tips (single taxpayers and married filing jointly) through 2028. Tip income must be reported on Forms 1099-MISC, 1099-NEC, or 1099-K. ([irs.gov](https://www.irs.gov/newsroom/the-one-big-beautiful-bill-what-gig-economy-workers-should-know?utm_source=openai))
- **Permanent Qualified Business Income (QBI) Deduction**: Many existing business deductions are now permanent under law, allowing longer-term tax planning. ([irs.gov](https://www.irs.gov/newsroom/the-one-big-beautiful-bill-what-gig-economy-workers-should-know?utm_source=openai))
- **Form 1099-K Reporting Thresholds Reverted**: The threshold for third-party settlement organizations (e.g., payment apps) to issue 1099-K returns is back to **$20,000** and 200 transactions—lower than some interim rules had set it. ([irs.gov](https://www.irs.gov/newsroom/the-one-big-beautiful-bill-what-gig-economy-workers-should-know?utm_source=openai))
- **100% Bonus Depreciation**: For qualifying business assets acquired after January 19, 2025, gig workers may deduct the full cost in the first year, provided over 50% is business use. ([irs.gov](https://www.irs.gov/newsroom/the-one-big-beautiful-bill-what-gig-economy-workers-should-know?utm_source=openai))
## Practical Examples
| Situation | How the Change Helps |
|---|---|
| A ride-share driver purchasing a new work vehicle | Use bonus depreciation to deduct full business portion in year one.
| A food delivery worker tipping heavily at events | Deduct up to $25,000 in qualified tips, reducing taxable income significantly.
| Freelancers using payment apps for large number of small transactions | Be aware that many transactions could trigger 1099-K reporting under the reverted threshold.
## Actionable Tips for Planning
1. **Document everything**: Separate qualified tips from other income; keep detailed logs and reports. Reporting on correct forms is essential.
2. **Track asset usage**: If buying a vehicle or expensive equipment, maintain records to prove over 50% business use to allow full first-year deduction.
3. **Estimate tax burden carefully**: These deductions can reduce taxable income and possibly affect eligibility for credits; run projections.
4. **Don’t rely solely on payments platforms**: Check whether you’ll get a 1099-K; file all income even if you don’t receive a form.
OBBB removes many short-term uncertainties for gig workers—by understanding and using these deductions, workers can significantly lower their tax liabilities in 2025 and beyond.