Gig Work
What is gig work?
Gig work includes a variety of temporary, on-demand, or freelance work. Common examples include, but are not limited to:
- Driving a car for booked rides or deliveries (e.g., Uber, Lyft, DoorDash, Instacart)
- Renting out part or all of a property (e.g., Airbnb, Vrbo)
- Running errands
- Selling goods online
- Renting out equipment
- Providing creative or other services
How are gig workers classified?
Most gig workers, including drivers for app-based transportation or delivery companies such as Uber, Lyft, Uber Eats, DoorDash, Instacart, Postmates, etc., are classified as self-employed independent contractors for Oregon state tax purposes.
Do I have to pay estimated tax?
If you are classified as an independent contractor, you may be required to pay quarterly estimated taxes.
If you work as an employee and do gig work on the side, you may avoid making estimated tax payments on your gig work income by withholding more from your employee paycheck.
If you have to pay estimated tax, payments must be made on time to avoid penalties. Estimated payments are due four times per year:
- April 15 for payment period January 1 to March 31
- June 15 for payment period April 1 to May 31
- September 15 for payment period June 1 to August 31
- January 15 for payment period September 1 to December 31
Note: weekends and holidays may slightly delay these due dates.
Find more information about payments here
How do I deduct miles driven on my taxes?
Many taxpayers use the optional "standard mileage rates" to calculate the deductible costs of operating an automobile for business purposes. To do so, you must be able to prove the business purpose of each trip for which you deduct the mileage.
Miles driven with a customer or delivery in the car, often called "booked" or "on-trip" miles, are typically documented in logs available to drivers through their company's app. The Oregon DOR is able to accept the miles in these logs without additional verification because the business purpose (transporting a customer or delivery) is documented.
Miles driven between bookings (from the drop-off of one customer/delivery to the pickup of the next) can also be counted towards the total mileage for deduction, but extra documentation is required to prove that those miles were for business rather than personal purposes. This is true in all cases where a personal vehicle is used for business purposes. Specifically, you must maintain a contemporaneous mileage log which shows the date, starting location, ending location, miles driven, and business purpose of each trip (for example, travelling between customers/deliveries). This log may be digital or hand-written, it just has to include the above elements and be updated at or near the time a trip occurred.
If a specific trip involves commuting (e.g., from your home to the first pickup) or any kind of personal activity (e.g., from a drop-off to a doctor's appointment), these are considered to be personal trips and the associated mileage is not deductible. Distinguishing between “personal" and “business" trips is essential to proving that you are claiming the correct number of miles.
Total miles driven with the app on, sometimes called "online" miles, are not currently accepted by the Oregon DOR. Driving with multiple apps open at once would cause double-counting of miles, and there is no way to distinguish between personal trips and business trips using "online" miles only.
For more information, see the IRS' page regarding business use of cars