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How the Gig Economy Works for Freelancers
Like anything in life, regular employment with a company has pluses and minuses. But maybe you've had enough of being at the whims of your company's work schedule. Maybe you enjoy the stability of having a regular paycheck, but you might be able to make more as a freelancer.
If you're thinking about becoming your own boss, you'll want to be aware of how taxes work for self employed people, what the inner workings of the gig economy are and what your options are as a freelancer for things like health insurance, bank accounts and self employed retirement plans.
Table of contents
Key Takeaways:
- Gig work is growing in popularity for several reasons
- The gig economy is made up of a huge variety of work types
- There are benefits to gig work that go beyond the financial
What is the gig economy?
There's no official gig economy definition, but if you've ever used a digital app to book a vacation rental, bought a homemade craft or ordered a pizza, you've probably taken part in this ever-expanding sector of the overall economy.
When you see the term gig economy meaning a sector of the overall economy that uses a gig model, it's probably referring to the system where labor is exchanged for money between individuals or companies through digital platforms. This gig model matches providers of goods and services with customers, usually on a short-term basis and often involving payment per individual task.
What are gig jobs?
It's become clear that you don't have to work a 9-5 to make a decent living. And, there are more and more side hustle jobs, as they're sometimes called, that can become serious long-term careers. Gig workers no longer only include people working to make an extra buck on top of their main source of income.
Gig economy jobs are also a stronger income stream for gig workers than the stereotypical pulling together weekend concert money or saving up for a summer trip. Some surveys show people can make upwards of $7,000 per month regularly. That kind of money goes towards saving to buy a home or pay off student loans.
You might be asking yourself what kind of side hustle you could get into. But what exactly are some of the gig economy examples that are fueling side hustle growth? Creating interior decorating tutorials? Walking dogs? Those are part of it, but some of the most lucrative gig economy examples are some you might not have thought of before.
Even as ride-sharing continues to grow in popularity, demand has kept the earning potential significantly high. Same with selling or renting property. But gig workers are also turning to fitness training, e-commerce, buying and reselling items online, and professions like photography and videography, tutoring and nannying are all growing parts of the gig economy.
Why become a gig worker?
There's no specific profile for gig workers. The appeal of working for yourself is universal, which is one reason it's growing. People choose to leave wage and salary work and migrate to the gig economy for all sorts of reasons, but they generally fall into several categories.
Some are free agents who want independence in their work and make most of their income as freelancers. Others are more casual about it, supplementing their primary income with freelance jobs. Still, others do it because it's the most convenient for their lifestyle, not because they don't want a 9-5 job. And some people simply need extra cash and can find side hustle jobs quickly and easily.
Quick tip
Track your expenses. If you do gig work, you can save a lot on taxes if you find every deduction.
What does the gig economy offer?
The benefits of the gig model are many. Some are obvious, but many workers don't realize other benefits until they're already firmly established as self-employed individuals.
Greater flexibility
More independence
Better work-life balance
What’s FlyFin?
FlyFin is a game-changer for freelancers, gig workers and independent contractors significantly lowering tax bills and saving self-employed people a ton of time by finding every possible tax deduction automatically.
W-2 employees can file taxes through FlyFin, too! Our CPA team files a guaranteed 100% accurate tax return for you.
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