Have you ever given someone a ride to the airport, delivered food, rented out your house, or taken on freelance work through an online platform? The gig economy, also known as the sharing or on-demand economy, is transforming how millions of people work.

But what exactly is it, and what should you know if you’re part of it? At its core, the gig economy is a labor market where people earn income by completing short-term jobs, tasks, or services, often through digital platforms like apps or websites. Think rideshare driving, food delivery, renting out a spare room, selling goods online, or freelancing your skills.

There are usually three main players:

  1. The worker providing the service
  2. The customer receiving it
  3. The platform that connects the two and often handles payments

People love gig work because it offers flexibility, independence, and the chance to earn extra income on their own schedule. Whether it’s a side hustle or a full-time pursuit, gig work can fit almost any lifestyle. But here’s the part many people overlook: gig economy income is taxable, even if it’s part-time, temporary, or paid in cash.

To learn more about record-keeping and filing requirements, check out the IRS Gig Economy Tax Center, and the Small Business and Self-Employed Tax Center for related resources on IRS.gov.