In 2017, the Bureau of Labor Statistics found that over 36% of Americans are a part of "the gig economy," a dramatic increase from 2-4% in 2005. This is the most recent data available and does not account for pandemic numbers. Those jobs aren’t just paid differently, there are different tax consequences too, from Form 1099 reporting requirements to paying self-employment taxes. Contractor and freelancer taxes can feel complex, so how do you sort it all out for your unique circumstances?Self-employment taxes don’t have to be intimidating. In today’s episode of the Taxgirl podcast, Kelly is joined by Sagar Shahagar Shah to sort out what it means to be part of the gig economy. Sagar is a CPA and the managing partner at his firm, as well as the managing member of his real estate investment fund. Prior to opening his firm, Sagar worked for KPMG. Now, many of the businesses Sagar engages with and consults with are smaller businesses and startups in the greater New York area. He regularly posts tax tips on his Instagram @sagarshah530.Listen to Kelly and Sagar talk about the gig economy and freelancer taxes:There’s been quite a shift from the "traditional worker." Sagar talks about IT professionals becoming contractors, people driving for Uber, or even making money as a TikTok creator. However, not everyone is prepared for the tax bill that comes along with the life of a freelancer.Kelly shares how she’s seen all sides of the equation herself, from years as a full-time freelancer to a full-time employee to years where she’s blended the two together. What kind of advice does Sagar give to folks to help them navigate all the complicated tax details?Whether or not your freelance work is something you think you’ll do forever, Sagar says he always advises getting some kind of legal structure in place, like an LLC. And further, freelancers and contractors should make an effort to keep business finances and transactions in a separate bank account. How should freelancers organize their finances and bookkeeping? How can they keep records separate and easy to sort and access? Is it worth hiring outside help?How do you know which type of entity or incorporation is right for you, and which factors play a part in making that choice? Kelly and Sagar say "pay attention to the rules" and not just the internet buzz that you’ve seen floating around various articles or TikTok videos.What’s going on with the home office deduction, can freelancers still take advantage of it? What other areas do contractors and freelancers often miss in their deduction reporting?All about self-employment taxes and how to plan ahead: What are Sagar’s tips for figuring out how to put away money and figure out all the details about planning for taxes?What are the best ways to track expenses and keep track of tax deductions? From photos of receipts to apps and tracking software, it’s all a matter of organization. Practice keeping good records from day one, especially when you spend cash.Specific to real estate partnerships, what advice does Sagar have for both investors and flippers for structuring and managing the partnerships?At one point does your gig become your job, and what are those breakpoints when someone might need to hire more help or think about a different structure? The key is to build from a strong foundation in the beginning to make sure you set yourself up for ease and success in the long term. More about Kelly:Kelly Phillips Erb created and hosts the Taxgirl podcast, your home for tax news, tax info, and tax policy. In each episode, she shares conversations about taxes, money, and the choices we make. Kelly is a tax attorney who works with taxpayers and tax practitioners like you every day....