Nation1099.com estimates that about 11% of US adults work full-time as freelancers
By Deborah Jeanne Sergeant
If you want to supplement your income or even replace it entirely with work that provides greater flexibility, consider entering the gig economy: picking up short-lived jobs you complete on your terms.
“It’s a whole industry in and of itself,” said Jeanne Morelli, vice-president of operations and senior business technology consultant at iV4, a firm with presence in Syracuse, Rochester and Buffalo. Her firm uses consultants who aren’t employees for short-term work.
Nation1099.com estimates that about 11% of US adults work full-time as freelancers, including some who also work a regular job. According to Intuit and Emergent Research, the number of on-demand American workers will increase from 3.9 million to 9.2 million between the years of 2016 and 2021. Upwork, a gig website, estimates that gig work puts more than $700 billion to the economy annually.
Technically, we’ve always had gig workers.
“People have been doing this a long time,” said Reneé Downey Hart, professor of practice at the Madden School of Business at LeMoyne College in Syracuse. “Whether moonlighting or doing whatever they had to do to make ends meet. Now we’re trying to quantify it.”
Gig work is different from running one’s own business. Gig work typically refers to on-demand services — hustles — or sporadic, short-term work. While gigs may result in lasting relationships between those hiring and those working, it doesn’t always.
“It’s an on-demand economy,” Downey Hart said. “We don’t have an 8 to 5 world anymore, since we have a global economy and connectivity.”
She added that people working gigs aren’t always in it for just the money.
“They often make less money but they do it for what they want: control and respect,” Downey Hart said. “The beauty of the gig economy is it allows agility and fluidity for both the worker and employer.”
One of the many perks about gig work is that you choose how much or how little you care to work. The flexibility offers true freedom while still bringing in some money and keeping you as busy as you’d like.
In modern times, apps usually facilitate gig work, since they add a layer of safety, provide an easy means of connecting with people who want to hire gig workers, and help ensure that workers receive their pay.
Ashley Barfield: A Dogged Gig Worker
Syracuse resident Ashley Barfield had always watched dogs for friends and family who were traveling and has a little experience helping dog trainers. A professional make-up artist focusing on wedding and prom events, Barfield wanted a means of extra income during the winter, typically a slow time for her make-up business. When she stumbled upon Rover, a dog walking app, she realized she found an ideal way to make more income while doing something she loves.
Rover helps her connect with vetted clients and takes a small percentage of her fees. She first meets the dog and client in a public place to ensure the dog (and owner!) is friendly. That initial introduction helps her more easily enter the client’s home when they’re gone.
“Before I completely open the door, I call out the dog’s name and put my hand out with the back of my hand, and then they sniff,” Barfield said. “I haven’t had a dog yet not let me in.”
For dog sitting, she usually watches the animals in their own homes.
Barfield admitted that at first, she felt nervous about using Rover, but it’s working out well for her. The owners provide care instructions and their vet’s phone number. The app offers an emergency hotline in case anything happens with a client or dog.
In addition to earning more money, Barfield likes that she can do something fun.
“It’s heartwarming,” she said. “How could you not like to meet new pets all the time?”
Barfield said that she thinks people like to hire gig workers like her because of the convenience. Instead of reserving a spot at a boarding kennel and stressing out their pets — many vets also provide boarding — going with a dog sitter app makes more sense.
Barfield advises people interested in app-based gigs to research the app well before signing up. She has tried a few gig sites that didn’t pan out because they had no presence in Central New York.
She also recommends meeting those who hire for gigs in a public place for safety’s sake.
“It’s an on-demand economy. We don’t have an 8 to 5 world anymore, since we have a global economy and connectivity.”
– Reneé Downey Hart, professor at the Madden School of Business at LeMoyne College.
Common Gigs Available
Sign up for ride sharing apps like Uber (www.uber.com) or Lyft (www.lyft.com) or delivery services like Grub Hub (www.grubhub.com) or Door Dash (www.doordash.com). If you have a smartphone, good driving record and a late-model vehicle in good condition, just add a friendly demeanor and you’re ready. The app allows you to choose when and where you want to drive. By maintaining good ratings with top-notch service, more business comes your way any time you’re available.
2. Mystery shopping
Also known as secret shopping, this gig involves working as a contractor for a third party hired by a business that wants an honest opinion about its goods and services. For example, a fast food restaurant wants to know if its employees are keeping the place clean, using the approved signs and uniforms, recommending additional items and overall presenting the right image. If you have a PayPal account (most pay this way), can observe and remember many details and can follow the many rules of the shop, you can get free goods and services (from oil changes to clothing to meals out) and a small stipend for your time. You can stack up several evaluations in a single day or snap them up whenever you’d like. Sign up at Sinclair (www.sinclaircustomermetrics.com), Best Mark (https://apply.bestmark.com), Market Force (www.marketforce.com/become-a-mystery-shopper) and Intelli-shop (www.intelli-shop.com/shoppers). Avoid scamming entities that ask for money upfront.
3. Selling your skills
By now, you are really good at what you do. Many websites offer an easy way to sell your knowledge as a contract worker. As with mystery shopping, don’t sign up for a site that requires money upfront. Although some provide premium membership, they at least allow participation for free. Try Guru (www.guru.com), Elance (www.elanc.com) or Upwork (www.upwork.com) for selling business, artistic, legal, writing, secretarial, sales, engineering, architectural, programming and other skills. While the people seeking workers aren’t necessarily all rock solid and paying top rates, they’re generally vetted and you can safeguard your payment by opting for secured funds paid to the site and held by them until you complete the project.
4. Selling your expertise
If you enjoy mentoring and teaching, then instructing online through Udemy (www.udemy.com) or Varsity Tutors (www.varsitytutors.com) to share your knowledge with the world.
5. Doing errands
You’re likely your family’s go-to for help because you know how to do a lot and you have the time. Why not get paid to help others? Tasks such as childcare, tutoring, personal care, cleaning, home repairs and dog walking are available at sites like Care (www.care.com) and Takl (www.takl.com).
Gig Work & Your Taxes
Gig workers must report their income to the Internal Revenue Service. Many people use gig work to supplement their retirement income. Consider how gig work affects your financial status if you’re drawing on Social Security.
Leyla Z. Morgillo, certified financial planner and associate adviser with Madison Financial Planning Group in Syracuse, said that if you’re not full retirement age and you draw on Social Security, the benefit will be reduced by $1 for each $2 you earn in excess of $18,240.
“That can pretty quickly erase any Social Security benefits being received,” Morgillo said.
In the year you will turn 66, which is your full retirement age (FRA), your benefits will be reduced by $1 for every $3 you earn above $48,600 until you reach age 66. If your goal is just to flex your entrepreneurial muscle, stay active and earn some pin money (providing your definition of “pin money” is less than $18,240), then don’t worry about it.
“If retirees find themselves working in a gig where they are treated as an independent contractor, one of the ways that they can help reduce their associated tax bill is to contribute to a SEP IRA,” Morgillo said. “The simplified employee pension plan (aka SEP) allows 1099 workers to contribute up to 20% of their net earnings from self-employment or $56,000, whichever is less, in 2019.
“One of the key features is that there is no age limit for contributing to a SEP, as long as the eligibility criteria is met, so contributions can be made even after age 70 ½.”
Once retirees are 65 and drawing on Medicare, they must make sure that their income falls below the thresholds for the surcharges for Medicare B and D premiums, as a result of the Income Related Monthly Adjustment Amount (IRMAA).
“Each person’s situation is unique and one provision does not generally apply to all,” said Lee M. Gatta, a chartered life underwriter, chartered financial consultant, accredited estate planner with Prudential Financial in DeWitt.
“Working in retirement even part time can change the taxation of income from all sources and possibly increase the rate at which their Social Security income is taxed,” Gatta added. “Gather as much information about your own benefits and ask a trusted adviser to help you determine how much additional income can be made without causing your tax bracket to creep up.