SCDOR releases tax tips for independent contractors

  • By cvbizz
  • March 5, 2021
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Ahead of Tax Day on April 15, the South Carolina Department of Revenue has released tax tips for gig workers or independent contractors.

These workers may include people who earn an income through digital platforms such as a website or app, writers, musicians and tradespeople. Individuals who provide rental services or goods also fall into this category.

To prepare for tax season, the SCDOR recommends gig workers do the following:

  • Keep good records of business expenses and income because they may lower the tax bill, but double-check the rules for deducting expenses related to the use of things such as their car or house.
  • Workers who have another job where their employer withholds taxes from their paycheck can fill out and submit a new Form W-4, which will allow them to request withholding additional taxes from their paycheck to help cover any gig work.
  • If gig work is their primary income, they should make quarterly estimated tax payments to avoid having a big tax bill they cannot afford and could generate penalties and interest.

For those who earn income from a rental property, the IRS reminds taxpayers that income is fully taxable, and special rules apply to rental property also used as a residence, said the SCDOR in a release.

The agency’s release also said that gig workers must still report their gig income on a tax return, even if they are paid in cash or goods and may not receive a W-2 or 1099.

In addition, when filing for South Carolina tax returns, SCDOR recommends taxpayers do the following:

  • Choose online filing and direct deposit for fast and accurate transactions.
  • When submitting a tax return, they should make sure their current mailing address is included, even if they are choosing direct deposit for their refund.
  • File for free using SC Fillable Forms or other free online services for which they may qualify at dor.sc.gov/iit-filing.

For more information on preparing for Tax Day, visit IRS.gov.

The post SCDOR releases tax tips for independent contractors appeared first on UPSTATE BUSINESS JOURNAL.

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