Every gig platform sends you a 1099 at tax time. Most workers are completely unprepared for what they owe. Here's the truth.
Your platform job took out $0 in taxes. If you made $40,000 driving, you might owe $8,000-$12,000 in combined federal, state, and self-employment tax. Many drivers owe more than they made all year.
When you're a W-2 employee, your employer withholds taxes every pay period. You never see the money — so you never spend it. As a 1099 worker, you receive all of it. Then you owe the IRS later.
W-2 employees split FICA taxes 50/50 with their employer. You pay 7.65% of your wages in Social Security and Medicare. As a 1099 worker, you pay both halves — 15.3% of your net profit. On $40K profit, that's $5,092. Just for Social Security and Medicare.
The IRS lets you reduce your taxable income through legitimate business deductions:
• Mileage: 67¢/mile in 2026 — the single biggest deduction for drivers
• Phone: Business percentage of your bill
• Equipment: Delivery bags, phone mounts, branded clothing
• Insurance: Rideshare insurance add-on, health insurance (self-employed deduction)
• Software: Mileage apps, navigation, scheduling tools
The IRS wants quarterly estimated tax payments if you expect to owe $1,000+. The payment dates are April 15, June 15, September 15, and January 15. Most gig workers don't know this until they get hit with penalties in year one.
The fix: Set aside 25-30% of every payment you receive. Put it in a separate savings account. Never touch it. That's your tax fund.
See exactly what you owe each quarter to avoid IRS penalties.
Quarterly Tax Calculator →