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7 Personal Finance Tips for Freelancers and Gig Workers
Personal Finance
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Freelance work and the gig economy have taken the nation by storm. A study commissioned by the Freelancers Union and freelance platform Upwork revealed that the gig economy’s workforce reached an eye-popping 57 million Americans in 2019, with increasing numbers likely to join in the future. You can choose freelancing as your sole source of income or you can do it in your spare time for extra money, but whatever path you choose, you need to pay attention to how you’re managing your money — otherwise, you’re liable to end up facing costly consequences. Here are seven personal finance tips that can benefit every person working as part of the freelance economy. 1. Always start with a budgetBeing your own boss is a common dream, but it isn’t easy. When you go out on your own as a freelancer or gig worker, you need to be able to gauge how much income you need in order to make it both worthwhile and feasible. To make that determination, you start with how much money you actually need, and that’s where reading some good budgeting tips can help. That’s where a budget comes in. Knowing how much you pay out in bills and other expenses each month, as well as how much you need to save for the future, tells you how much you need to earn. 2. Create your own withholding scheduleWhen you’re a W-2 employee, your employer withholds the appropriate amount of federal and state taxes on your behalf and sends them in so that you don’t have to. It’s done with every paycheck. As a freelancer, you are responsible for paying your own taxes, and if you don’t set aside part of your income on a regular basis, you’ll be in for a rude awakening come tax time. 3. Send the taxes you’ve withheld every quarterPeople who are self-employed are required to send in quarterly estimated taxes to the federal government, their state, and in some cases to their city or county. Failing to do so can lead to penalties, so make sure that you read up on the rules and due dates for each. These taxes can usually be submitted online or via snail mail, and if you choose the latter there are specific payment forms that should accompany your tax submissions. 4. Record what you’re spending and earningIt doesn’t matter whether you use a software package or just keep track using a spreadsheet or ledger, but whatever you do, record every dollar that comes in and that you spend for the business. Not only will this help you know exactly what your tax liability is, but you will have an easy-access record when it’s time to list all of your business deductions. It will also help you to see clearly whether your business is profitable. 5. Last word on taxes – hire a pro If you’ve decided to be a freelancer, you’ve already taken on responsibilities that go far beyond what most workers carry. Don’t take the risk that you’re underestimating how much you should withhold or what is or isn’t an eligible deduction. Work with a tax professional like us to find out what you can and can’t do. Not only will you feel more secure as you move forward, but we can also give you some help with minimizing your tax liability. 6. Save for a rainy daySaving is always a good idea, but when you’re working as a freelancer or a gig worker, you’re not getting regular paychecks the way that you do when you work for an employer. There may be times when you’re so busy you can hardly keep up, but you can also have slow periods or times when your clients aren’t paying quickly. Building an emergency fund will help you smooth out your ability to pay bills during slow patches. 7. Be disciplined about saving for retirementOne of the most valuable benefits that comes with many W-2 jobs is a dedicated retirement plan like a 401(k) or pension. If you’ve fully embraced freelancing and left company benefits behind, you’ll need to set up your own retirement savings plan for when you no longer want to work. Most experts advise treating long-term savings as if they’re a utility bill – something that needs to be paid every month. Setting up automatic contributions to a Roth IRA, SEP IRA, IRA, Solo 401(k) is easy and ensures that your nest egg is building. Ask any successful gig worker or freelancer about their jobs and you’re likely to hear that they love it. But dig a little deeper and you’ll also find out that they count their management of finances, taxes and savings as an important part of their responsibilities. By following these tips and including them in your daily or weekly tasks, you can avoid headaches and set yourself on a path to success.
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Tax and Financial Insights
by NR CPAs & Business Advisors
2026 IRS Mileage Rates: Key Updates and Insights
The IRS has rolled out the inflation-adjusted mileage rates for 2026, offering taxpayers an efficient way to claim deductions for vehicle-related expenses incurred for business, charity, medical, or moving purposes. These adjustments reflect the continued economic shifts impacting car operation costs.
Effective January 1, 2026, the new standard mileage rates are established as follows:
- Business Travel: Increased to 72.5 cents per mile, inclusive of a 35-cent-per-mile depreciation allocation. This marks a rise from the 70 cents per mile rate set for 2025
- Medical/Moving Purposes: Reduced slightly to 20.5 cents per mile, down from 21 cents in the previous year, reflecting the variable cost considerations.
- Charitable Contributions: Consistent at 14 cents per mile, a fixed rate unchanged for over a quarter-century.
As is typical, the business mileage rate considers the integral fixed and variable costs of automobile operation. Meanwhile, the medical and moving rates remain contingent on variable expenses as determined by the IRS study.
It is critical to note that the One Big Beautiful Bill Act (OBBBA) held firm on disallowing moving expense deductions except for specific cases within the Armed Forces and intelligence community, marking a substantial shift since 2017.
When engaging in charitable work, taxpayers might opt for a direct expense deduction over the per-mile method, covering gas and oil costs. However, comprehensive upkeep and insurance costs are non-deductible expenses.
Business Vehicle Use Considerations: Taxpayers can alternatively compute vehicle expenses using actual costs, which might benefit from shifting depreciation rules, particularly through bonuses and first-year advantages. Keep in mind, however, reverting from actual cost calculations to standard rates in subsequent years is restricted, particularly per vehicle protocol and when exceeding four vehicles in concurrent use.
Additionally, parking, tolls, and property taxes attributable to business can be deducted independently of the general rate, an often-overlooked advantage by many business owners.
Tax Strategies for Employers and Employees: Reimbursements based on the standard mileage framework, providing the right documentation is in place, remain tax-free for employees. Meanwhile, the elimination and continued prohibition of unreimbursed employee deductions continue, with particular exceptions offered to qualified personnel across specific occupations.
Opportunities for Self-employed Individuals: Entrepreneurs remain eligible for deductions on business-related vehicle use via Schedule C, with potential to account for business-use interest on auto loans.
Heavy SUVs and Deduction Advantages: Heavier vehicles exceeding 6,000 pounds but under 14,000 pounds open opportunities for substantial tax deductions through Section 179 and bonus depreciation avenues. The lifecycle of such a vehicle bears implications on recapturing initially claimed deductions, urging cautious tax planning.
For professional guidance on optimizing your vehicle-related tax deductions and understanding their implications on tax strategies, contact our office in Coral Gables, Florida, where expert advice and strategic insights are just a call away.
Educator's Deduction Reform: Key Changes Under OBBBA
The One Big Beautiful Bill Act (OBBBA) introduces significant enhancements for educators' tax deductions starting in 2026, offering both strategic opportunities and planning considerations for educators who qualify. With the reinstated itemized deduction for qualified unreimbursed expenses, educators have a broader spectrum of financial relief. This is complemented by the retention of the $350 above-the-line deduction, allowing educators to maximize their tax benefits by selectively allocating expenses between these avenues.
Understanding the nuances of these changes is crucial for educators and financial advisors alike. The dual-option deduction strategy can potentially enhance tax efficiency, thereby aligning with broader financial planning goals.
At NR CPAs & Business Advisors, based in Coral Gables, Florida, our expertise in tax preparation and planning provides invaluable support to educators navigating these changes. Our comprehensive approach, combined with personalized advice from our experienced team, ensures compliance and optimization in line with the latest tax legislations.
Given these updates, it is imperative to engage with seasoned professionals to fully leverage your deduction strategies. Contact us today to streamline your tax planning under OBBBA's new guidelines and maximize your deductions for upcoming tax years.
