The gig economy started out as a way for workers to earn extra money though side hustles, but it has long since evolved well past that stage. Today, an estimated 57 million workers participate in the U.S. gig economy, according to Deloitte — and many of them hold multiple side gigs.
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Gig workers currently represent more than one-third (36%) of the total American workforce. By 2027, these workers are expected to represent the majority of the workforce.
With so many Americans working side hustles, it’s more important than ever to develop money management habits designed to benefit gig workers. Here are four money management tips if you work multiple side gigs.
Don’t Sleep on Tax Planning
Unlike traditional payroll workers, gig workers can’t rely on employers to withhold their federal and state income taxes. Instead, you’re responsible for keeping track of your income, expenses and tax liability.
This can get complex when you hold multiple side gigs because you need to keep up with several different income sources. To succeed, you need to stay organized, plan early and keep at it every day. You’ll also need to pay estimated taxes every quarter to the IRS and your state tax authority.
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Fidelity recommended setting aside a percentage of all your gig income and putting it into a dedicated tax account. This will help you avoid scrambling for cash when it’s time to pay your taxes.
To learn more, visit the IRS Self-Employed Individuals Tax Center. You can also read Fidelity’s own tax tips for the self-employed.
Take Advantage of Available Deductions
Speaking of taxes: One of the best money moves you can make as a multiple gig worker is to research all the deductions available to free lancers and the self-employed. These deductions lower your tax bill and put more money in your pocket.
What’s more, with multiple side gigs you might be available for multiple deductions that apply to specific jobs, according to Intuit Turbo Tax.
For example, as a rideshare driver you can deduct certain mileage costs. If you’re also a tennis instructor, you can deduct certain equipment costs. And if one of your side gigs is landscaping, you might be able to deduct rent for spaces you use to store landscaping tools.
Here are some common deductible expenses available to gig workers, according to Intuit Turbo Tax:
- Business mileage on your car.
- Dues and subscriptions related to your work.
- Tools and equipment.
- Tuition for work-related education and training costs.
- Certain home office costs.
Spread Your Income Around
One advantage of having multiple side gigs is that you get different payments from different clients and employers. This allows you to devote specific payments to specific financial purposes, whether it’s paying down debt, saving for a home, building an emergency fund or buying a work vehicle.
According to a UMB Financial blog post, devoting different side gig payments to different accounts has the dual benefit of helping you meet financial goals while also making it easier to keep track of your money.
Consult a Financial Advisor
As you take on more side gigs — and earn more money — consider hiring a financial advisor. The right professional can help you manage different accounts, create a budget specific to gig income and offer guidance on how to build a secure financial future.
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This article originally appeared on GOBankingRates.com: 4 Money Management Tips for Working Multiple Side Gigs
