1099 Contractor

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Guide - Gig Worker Guide

The Gig Worker Guide is an overview of what it takes to be a part of the gig economy in San Francisco. Every gig, whether you use an online platform or not, is different. We provide the basic steps, along with tips, tricks and common mistakes to avoid. Explore below or download the Guide for quick reference.ence.

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Gig Worker Guide

The Gig Worker Guide is an overview of what it takes to be a part of the gig economy in San Francisco. Every gig, whether you use an online platform or not, is different. We provide the basic steps, along with tips, tricks and common mistakes to avoid. Explore below or download the Guide for quick reference.ence.

Set Up Your Business

Business structure

Providing services and resources without a traditional employer, gig work qualifies you as a small business owner. Every person who engages in business in San Francisco must register at the SF Office of the Treasurer & Tax Collector (TTX) within 15 days of commencing business in the City. This includes gig workers. You don’t need to register with the IRS. You can just classify yourself using your Social Security number.

Register your business

Register your business with the City through the Office of the Treasurer and Tax Collector (TTX).

Note
You may choose to obtain a separate business address, or you may use your personal address for your registration.

Professional Requirements

Make sure to take a moment to investigate whether the service you offer requires a professional certification or license. Career One Stop is one free online resource to assist you in determining if a license is required for your occupation.

Key things to know about a home office:

1. Clients cannot come to your home
2. You can't display advertising
3. You can't use more than 25% of the space for commercial purposes

Review the SF Planning Department's Guide to Home Offices for more information.

Note
Beware that operating a home-based business could violate your lease or Homeowners Association (HOA) charter.

After Opening

Solicit work

There are several ways to seek out work, including gig work platforms, word-of-mouth, advertising, partnerships, etc.

Bidding on work and compensation

Know your rights in getting paid. One of the most difficult aspects of being a gig worker is getting paid adequately and on time. Make sure you develop contracts that establish your payment for work and provide a clear scope of services and deliverables for the project.

Contract reading/writing

Know your rights in getting paid. One of the most difficult aspects of being a gig worker is getting paid adequately and on time. Make sure you develop contracts that establish your payment for work and provide a clear scope of services and deliverables for the project.

Establish bank accounts

A bank account is the first step to financial security for yourself and your family. Without one, it is harder to save and to get well-priced car loans, credit cards, or mortgages – the exact financial tools needed to climb the economic ladder. Not all bank accounts are equal, so make sure your account works for you and isn’t costing you too much money in fees.

Bank On San Francisco makes it easy for you to get a bank account – even if you’ve had problems with an account in the past, have never had an account before, or are not a U.S citizen. Learn how to find a participating bank or credit union and open a free or low-cost checking account.

Create a habit of savings

Creating a regular savings habit can help you weather financial emergencies and prepare for retirement. Start early, save consistently, and bump up your contributions when your budget allows. Even if your income is volatile or uneven, aim to set aside a portion of each paycheck for emergencies and retirement. Here are some strategies and tools to use:

Set up direct deposit and save automatically with split deposit. Direct deposit is faster, easier, and safer than paper paychecks. And “splitting” your direct deposit into checking and saving (or multiple saving/retirement accounts) makes saving automatic. We all know that it’s too easy to plan to save, but then forget – so set it and forget it with split direct deposit!

To save for emergencies (or other short-term goals), the EARN Starter Savings Account is a free, easy to use program that helps you save for what's most important. You can start saving in minutes. For every $20 you save, you'll get $10 in cash rewards. In just 6 months, you'll have at least $180 saved from your own contribution and earned rewards.

To save for retirement, MyRA makes it easy and reduces the complexity of many different retirement savings alternatives. MyRA is a starter retirement savings account developed by the United States Department of the Treasury for people without access to a retirement savings plan at work.

Pay your taxes

Taxes are more complicated for people who do not have a traditional employer. Gig workers must take additional steps in calculating their income and figuring out their tax payments, including deducting eligible expenses. When self-employed you're paid in gross and get the full amount of pay for your work.

Most gig work platforms pay people through a third-party system. In these cases, a form 1099-K is generated. Although some companies send 1099-K forms to all their workers, you cannot rely on this annual reminder to think about taxes.

Gig workers may need to make estimated quarterly payments. It is important to track your business-related expenses, as these may be deductible. The more specific the better – some advisors recommend setting up separate banking accounts for work and personal spending, and using personal financial management software, like Mint or Quicken, to track your income and business and personal expenses. Advisors also recommend putting aside 25- 30% of each paycheck for tax payments.

Need help? San Francisco Office of Financial Empowerment recommends these the following free resources:

Free Tax Preparation

Earn It! Keep It! Save It! Find free tax preparation services in the Bay Area designed to help low- to-moderate-income individuals, families, and seniors. Tax returns are prepared by trained and IRS-certified volunteers at local community organizations.

The IRS has also set up a Sharing Economy Tax Center, with answers to many common questions.

Financial Coaching

BALANCE, formerly Consumer Credit Counseling Service of San Francisco, provides counseling services and free workshops on understanding your credit score, consolidating debt, bankruptcy, money management, and first-time homeownership. Their website also includes tools and resources to learn more about credit.

Mission Economic Development Agency (MEDA) provides low-and-moderate-income Latino families with bilingual Spanish and English workshop curriculum and coaching to achieve financial literacy.

MEDA’s financial education program helps participants achieve three key outcomes:

    • 1. Improving credit scores to 650 or higher
    • 2. Increasing savings to three months of living expenses or greater
    • 3. Reducing debt to income ratio to 40% or lower

San Francisco Housing Development Corporation (SFHDC) works closely and independently with each client until he/she meets his/her financial goals. SFHDC clients receive individualized services that will lead to homeownership and/or financial stability. SFHDC counselors offer free professional advice and strategic resources to help you develop an action plan that will ensure you meet your personal goals.

SparkPoint Centers, created by the United Way of the Bay Area, helps families create step-by-step plans to tackle their unique financial needs and connect them to services that address each one. Services range from Financial Coaching, Career Coaching/Counseling, Credit and Debt Counseling, Benefits Screening, Tax Preparation and more.

Note
Depending on the legal form of the services and resources you provide through gig work, you may be required to pay the federal self-employment tax, among other taxes. Review the Forms and Associated Taxes for Independent Contractors.

Gig Worker Rights and Protections

Obtaining gig work through digital platforms has a variety of benefits that many workers enjoy, but because you are considered your own business and not an employee you generally do not receive traditional workers’ rights and protections. Furthermore, some digital platforms do not allow for negotiating work rates or contracts locking you into the terms provided.

As a gig worker on a platform you have little to no recourse regarding:

•  Deactivation from a platform
•  Collecting on severely late payments or non-payment
•  Protection against discriminatory or predatory behavior

The benefits traditional employees enjoy under “social contract” including unemployment insurance, disability insurance, pensions and retirement plans, worker’s compensation for job-related injuries, paid time off, and protections under the Fair Labor Standards Act. If you determine that you need legal assistance, you can find information on low cost, affordable resources under the Legal Services tab of the SF Biz Portal.

Is Gig Work Right for Me?

Whether you are considering gig work to supplement existing income, rejoin the workforce, or as a stepping stone to building your own business, here are a few questions you may want to ask yourself:

  • Do I perform best in an environment where I get to interact with people, or am I more effective working on my own?
  • Do I already possess a skill that I can monetize
  • What is the minimum amount I need to earn each month in order to meet my expenses?
  • Do I have enough time for it to be worth the effort?
  • Do I understand the do-it-yourself requirements of the gig economy?

Free resources are available to take a gig career assessment and explore the world of gig work in San Francisco.