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Some of the tax changes for the IRS have been released and some of them have affected gig workers. They usually release this based on Inflation and it is good for us in the sense that we can write off more of our expenses!
So in this article, We are talking about:
The IRS Updates that affected drivers
How this will impact us
Everything in between
Disclaimer: The content of this article does not contain and is never intended to be legal, business, financial, tax, or health advice of any kind, This article is for entertainment purposes only. It is advised that you conduct your own research and consult with qualified professionals before applying anything you find online.
Also, we did also go over these updates in a Live Show that Budsoda and I hold every Tuesday and we have had some really engaging conversations with our viewers, So make sure to join us on Tuesdays at 9pm EST to be a part of the conversation.
Standard Deductions
For single taxpayers and married individuals filing separately for tax year 2025, the standard deduction rises to $15,000 for 2025, an increase of $400 from 2024.
For married couples filing jointly, the standard deduction rises to $30,000, an increase of $800 from tax year 2024.
For heads of households, the standard deduction will be $22,500 for tax year 2025, an increase of $600 from the amount for tax year 2024.
Standard Mileage Rate
The standard mileage method is where you take the business miles you drove to deduct the amount you owe on your taxes and every year they adjust this number.
Self-employed and business: 70 cents/mile
Charities: 14 cents/mile
Medical: 21 cents/mile
Moving (military only): 21 cents/mile
For Gig Workers, this is an increase of 3 cents/mile which can really add up over time and is HUGE for us using the Standard Mileage Rate for write offs.
Marginal Rates
Marginal rates are in regards to the tax brackets you would fall into based on how much you make every year.
For tax year 2025, the top tax rate or tax bracket remains 37% for individual single taxpayers with incomes greater than $626,350 ($751,600 for married couples filing jointly). The other rates are:
35% for incomes over $250,525 ($501,050 for married couples filing jointly).
32% for incomes over $197,300 ($394,600 for married couples filing jointly).
24% for incomes over $103,350 ($206,700 for married couples filing jointly).
22% for incomes over $48,475 ($96,950 for married couples filing jointly).
12% for incomes over $11,925 ($23,850 for married couples filing jointly).
10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly).
Alternative Minimum Tax Exemption Amounts
For tax year 2025, the exemption amount for unmarried individuals increases to $88,100 ($68,650 for married individuals filing separately) and begins to phase out at $626,350. For married couples filing jointly, the exemption amount increases to $137,000 and begins to phase out at $1,252,700.
Earned Income Tax Credits
For qualifying taxpayers who have three or more qualifying children, the tax year 2025 maximum Earned Income Tax Credit amount is $8,046, an increase from $7,830 for tax year 2024. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.
Also, I know I just dropped some crazy jargon for a bunch of these subjects, so if you need more clarification on how some features work, feel free to check out the financial fridays playlist to learn more about the tax code, curated for gig workers in the gig economy.
Unchanged for Tax Year 2025
Now not all aspects of the tax code that affect gig workers have been updated or changed. So the following subjects have not been affected.
Personal exemptions
For tax year 2025, Personal Exemptions remain at 0, as in tax year 2024. The elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act of 2017.
Itemized deductions.
There is no limitation on itemized deductions for tax year 2025, as in tax year 2024 and preceding, to tax year 2018. The limitation on itemized deductions was eliminated by the Tax Cuts and Jobs Act of 2017.
A Quick Note AboutThese Updates
These are all the changes that have affected gig workers specifically, not you specifically. I am going to leave the full list of updates in the description, and before applying any of that information, it would be wise to consult a qualified tax professional.
Just make sure you are consulting with a tax professional that would not overcharge you for the 1099’s you are inevitably accumulating. Which is where GigTax is here to help!
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If you would like to add some other perspective to the IRS updates and how it affects Gig workers, feel free to email me: drivenwyld@gmail.com and who knows? Maybe your email or perspective and be featured in a post as well!
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