and what they need opens new opportunities for accountants and accounting tech.
by 卡塔尔世界杯常规比赛时间
one of the most radical and ramifying shifts in employment economics of the past several decades is the advent of gig workers—the millions of americans working out of their garages, attics, closets and breakfast nooks.
and all of them have unique accounting needs.
accounting firms need them. and venture-backed software startups are chasing them.
new kinds of client
the expansion of this workforce has been relatively sudden, facilitated by technology, and spurred to even greater scope by the covid pandemic. a survey revealed that 44 million americans were self-employed in 2019, roughly 28 percent of the workforce.
and that was before covid.
these independent contractors range from uber/lyft-type drivers to highly paid consultants. they include graphic artists, commercial writers, crafters, short-term rentals, food and parcel deliveries, house cleaners, home healthcare workers, millions whose work defies category, bookkeepers, and freelance accountants.
despite their variety, they all have something in common: a need to keep track of their finances and pay their proper taxes. and for all of them, excepting only the free-lance accountants, accountancy is not within their professional purview.
they probably hate to keep proper track of their finances and loathe the approach of april 15.
at the same time, organizations that hire them—in 2020, one in six workers at an organization weren’t employees—need the unique accounting and tax (and legal) considerations that go with them.
the result is two kinds of opportunities for accounting firms.
gig needs
gig workers tend to be pretty good at what they do. if they aren’t, they aren’t in business for long.
but they aren’t too good at juggling their money. and, being independent thinkers and high-energy entrepreneurs, they may be involved in multiple services, often with numerous cash-flow platforms.
a survey conducted by abound, a digital platform that helps the self-employed manage taxes and benefits, found that 42 percent of independent workers fail to pay their quarterly estimated taxes because they either aren’t aware of what they need to do or can’t figure it out.
so look what they need help with:
• bookkeeping;
• managing cash flow;
• keeping records;
• understanding relationships between costs, expenses, overhead, revenues, and investments;
• complying with financial obligations;
• estimating and paying quarterly income and self-employment taxes;
• understanding, calculating, and managing deductions;
• filing state sales, income and other taxes;
• filing federal taxes;
• appreciating the potential of digital platforms for their work;
• and grappling with the irs after any of the above results in questionable tax returns.
gig opps
all these needs are opportunities for cpa and tax prep firms. but the people with those needs are a very special kind of client.
• they are very busy.
• they don’t have time for the nitty-gritty of financial records.
• they work weird hours.
• they might not know much about business management.
• they night see financial records as irrelevant to what they do.
• they might not have a budget for accounting by a third party.
• the lyft driver may zoom in from a car, the consultant from an airport gate, the airbnb host from a foreign country, the house cleaner from somebody operating a vacuum cleaner.
• they’re entitled to (and much in need of) various deductions.
• they’re tempted to hide money.
consequently, taking on gig clients is different from employee and business clients. they need a diverse medley of services, especially advice on everything from bookkeeping to software to specialized internet platforms to tax compliance, not to mention reminders of all sorts of things.
enter the irs
federal and state governments are reacting to the expanding revenue in the gig sector. the irs often connects with “third-party settlement organizations,” that is, the platforms that underlie gig-based businesses ranging from uber to airbnb. many (but not all) of these platforms are required to report payments and 1099-ks. as recently as january 1, 2022, third-party payment networks such as paypal and zelle became required to report transactions above $600, way down from the threshold of $20,000.
as the government reacts to the new gig economy, these new regulations are in flux. accounting firms may see many new opportunities coming along, but they also have to keep an eye on new rules and regulations that their new clients are too busy to keep up with. they also need to look for what these particular clients need.