- Independent contractors pay 15.3% SE tax — employees have FICA split with their employer
- Gig workers receive 1099-NEC (not W-2) and must pay estimated taxes quarterly
- The IRS ABC test: free from control, outside usual business, independently established trade
- Net self-employment income of $400+ triggers SE tax — no threshold exemption
- Contractors can deduct 72.5¢/mile, phone, equipment — employees generally cannot post-2017
2026 EDUCATIONAL GUIDE
Employee or Independent Contractor? 2026 Educational Quiz for Gig Workers
7 questions to help you understand how the IRS distinguishes employees from independent contractors.
Who controls when and where you work?
Frequently Asked Questions
What is the difference between an employee and an independent contractor?
Employees have taxes withheld by their employer and receive W-2 forms. Independent contractors receive 1099 forms, pay SE tax of 15.3%, set their own hours, use their own tools, and often work for multiple clients.
Do gig workers (DoorDash, Uber, Instacart) count as employees or independent contractors?
Most gig platform workers are classified as independent contractors. You receive a 1099-NEC, owe SE tax on net earnings, and can deduct business expenses like mileage, phone bills, and hot bags.
How do I know if I owe self-employment tax?
If your net self-employment income is $400 or more in a year, the IRS requires you to pay SE tax of 15.3% on 92.35% of your net earnings. You also likely owe quarterly estimated payments if you expect to owe $1,000 or more.
What is the ABC test for worker classification?
The ABC test (used in California and other states) presumes a worker is an employee unless the company proves: (A) the worker is free from control, (B) the work is outside the usual business, and (C) the worker has an independently established business.
Helped 5,000+ freelancers navigate IRS rules. Specializes in gig economy and 1099 taxation.