What This Means for Gig Workers
The ruling has ignited debate about whether the state’s enforcement efforts place an unfair burden on people who, in many cases, already struggle with financial security. In my years in the legal field, I’ve seen firsthand how gig workers often rely on secondary income streams—like driving for rideshare services or answering questions on sites likeJustAnswer—to pay their bills.
- Complex Tax Filings: When you juggle multiple gigs, keeping track of income can be cumbersome. Still, the law is clear: all income must be reported, whether it comes with a W-2, 1099, or even unreported cash payments.
- Risk of Underreporting: Some gig workers, unfamiliar with complicated tax rules, might inadvertently omit certain streams of income. The IRS, seeing a gap in reported income, is now taking more aggressive steps to identify these potential discrepancies.
- Fear of Penalties: Many gig workers live paycheck to paycheck, and the specter of back taxes, penalties, and interest adds another layer of stress. It’s not that they’re maliciously avoiding taxes; more often, they lack the resources or knowledge to accurately report earnings.
IRS Commissioner Danny Werfel reinforced this point: “Like their fellow Americans who earn income through traditional means, U.S. taxpayers who earn income from digital and other platforms…need to pay their fair share of taxes.”
However, no conversation about taxes in California would be complete without mentioning Governor Gavin Newsom and his approach to state spending. Critics argue that under his leadership, California’s budget has ballooned, and new tax revenue is being sought to cover the resulting deficits and spending obligations.
