Sole proprietors, freelancers, and gig workers
Taxes for Self-Employed and Gig Workers
Yes. R Tax Services prepares returns for freelancers, independent contractors, and gig workers, including Schedule C, self-employment tax, and the Indiana and Kentucky returns that go with them. We are an Enrolled Agent led firm in Evansville, Indiana, and we work with self-employed clients in person or through our secure client portal.
Who this is for
If you drive for a rideshare or delivery app, sell through an online marketplace, take freelance projects, or work as an independent contractor, the IRS treats you as running a business. That holds even if it is a side job next to a W-2 paycheck. The IRS Gig Economy Tax Center is clear that this income is taxable whether you are paid in cash, through an app, or in property, and whether or not you receive a 1099.
We work with first-year freelancers figuring this out for the first time and with established sole proprietors who want an Enrolled Agent to take the return off their plate.
What we handle
- Schedule C. Your business income and the ordinary and necessary expenses of earning it, which are deductible under IRC section 162 (About Schedule C).
- Self-employment tax. Social Security and Medicare for the self-employed, figured on Schedule SE once net earnings reach $400 (IRC sections 1401 to 1402, Schedule SE instructions).
- Estimated tax planning. We work out what to pay each quarter so you are not surprised in April, using the safe harbor rules in IRC section 6654 and Form 1040-ES. For Indiana, that includes state and county tax through Form ES-40 or INTIME. Kentucky residents use Form 740-ES.
- Home office and vehicle deductions. We help you decide between the regular and simplified home office methods (IRC section 280A, Publication 587) and between the standard mileage rate and actual expenses (IRS standard mileage rates).
- Qualified business income. Many sole proprietors qualify for the qualified business income deduction under IRC section 199A, which the One Big Beautiful Bill Act made permanent (IRS QBI deduction page). We apply it where it fits.
- Multi-state work. Gig and contract work done across the river in Kentucky is not covered by the Indiana and Kentucky wage reciprocity agreement. See our page on Kentucky returns for Indiana residents.
1099 forms after the One Big Beautiful Bill Act
Two reporting thresholds changed in 2025. For Form 1099-K, payment apps and online marketplaces now have to file only when your payments are over $20,000 and you had more than 200 transactions, and the change applies retroactively (IRS Form 1099-K FAQs). That threshold does not apply to card payments: if you take credit or debit cards through a payment processor, it issues a Form 1099-K for those sales regardless of the amount. For Form 1099-NEC and 1099-MISC, the threshold rises from $600 to $2,000 for most payments made after December 31, 2025, with inflation adjustments starting in 2027 (Form 1099-MISC and 1099-NEC instructions).
Fewer forms does not mean less taxable income. Expect to receive fewer 1099s for small jobs. Everything you earn still belongs on your return, so your own records matter more than they used to.
What to bring or upload
- Every 1099-NEC, 1099-K, and 1099-MISC you received, plus your own total of income that did not come with a form
- A profit and loss summary for the year. Our free Self-Employment Organizer builds one for you.
- Your mileage log, or the app records you used to track business miles
- Home office square footage and the total square footage of your home, if you claim a home office
- Records of estimated tax payments made to the IRS, Indiana, or Kentucky
- Health insurance and retirement plan contribution statements
- Last year's return, if you are new to us
Our post on what you need to file self-employment taxes walks through each of these in more detail.
Common mistakes we see
- Reporting only what is on a 1099. Cash and app payments without a form are still income.
- No quarterly payments in the first year. New freelancers often find out about estimates at filing time, along with an underpayment penalty.
- Rebuilding a mileage log in April. Logs pieced together after the fact are hard to defend under section 274(d) (Publication 463).
- Claiming a home office that is not used exclusively for business. A dining table that doubles as a desk generally does not qualify.
- Mixing personal and business spending in one account. It makes every number on Schedule C harder to support.
- Assuming the new tips and overtime deductions apply. The overtime deduction covers only overtime pay required by the Fair Labor Standards Act, which applies to employees, so independent contractors do not qualify. The tips deduction can apply to some self-employed people in listed tipped occupations, with limits (IRS guidance on the tips deduction).
How the engagement works
Before any work begins, you receive an engagement letter that spells out exactly what we will prepare for you. You can meet us at our office at 1102 E Virginia Street in Evansville, drop off your documents, or upload everything through our secure client portal and work with us virtually. How We Work explains each option.
We review your records, ask about anything that looks incomplete, prepare your federal and state returns, and walk you through the results before anything is filed. If you want help setting next year's estimated payments, we build that in. Questions about the process are answered on our FAQ page.
Frequently Asked Questions
Do I have to report gig income if I did not get a 1099?
Yes. The IRS says gig income is taxable and must be reported even when it is not reported on a Form 1099-K, 1099-NEC, 1099-MISC, or W-2. Your own records of what you were paid are what count.
When do I owe self-employment tax?
Self-employment tax applies when your net earnings from self-employment are $400 or more for the year (IRC section 1402(b)). It is figured on Schedule SE and covers Social Security and Medicare, and half of it is deductible in figuring adjusted gross income (IRC section 164(f)).
Do I need to make quarterly estimated tax payments?
Generally, yes, if you expect to owe $1,000 or more in federal tax when you file (IRC section 6654). Payments are due in April, June, September, and January. Indiana uses Form ES-40 or INTIME for state and county estimates, and Kentucky uses Form 740-ES.
What changed with Form 1099-K and Form 1099-NEC?
The One Big Beautiful Bill Act restored the Form 1099-K reporting threshold for payment apps and online marketplaces to more than $20,000 and more than 200 transactions. Card payment processors still issue a Form 1099-K for card sales regardless of the amount. It also raised the Form 1099-NEC and 1099-MISC threshold from $600 to $2,000 for most payments made after December 31, 2025. Your income is taxable either way.
Can I deduct my mileage without a log?
Vehicle expenses fall under the strict substantiation rules of IRC section 274(d), so you need records showing the amount, the time and place, and the business purpose of each trip. A mileage log kept as you go is the standard way to meet that rule (IRS Publication 463).
Related Pages and Tools
Ready to Get Started?
Tell us about your situation and we will set up the right next step, in our Evansville office or through the secure client portal.