New Payroll Tech Tool Serves Accountants With Gig Worker Clients

More than 59 million US workers are 1099 employees. The Covid-19 pandemic accelerated the move to gig work, with many deciding to work for ride-share apps such as Uber and Lyft, and for creative platforms such as YouTube. The number of self-employed individuals increases every day and, when taking these jobs, some don’t consider the tax implications of owning their own business.

This can be challenging for accountants as they gather relevant income information from gig workers. Technology to make these processes easier has lagged. Documents, income history, or mileage history must be shared across a variety of different platforms.

Once the information is received, it needs to be manually added to the accounting system. These roadblocks create extensive back and forth between the accountant and their client.

Payroll connectivity can aggregate income (and mileage) data across multiple jobs. Improving the user experience will allow tax software providers such as TurboTax, as well as accountants, to better serve more candidates.

Payroll connectivity allows accountants to work more seamlessly with gig workers, providing them access to pertinent earnings and mileage data as well as documents (1099s & W2s) directly tying into and pulling data from gig or payroll platforms. By using an automated system that can be integrated with existing tax filing software, forms will automatically populate with the worker’s data and information removing the headache of manual entry.

Here are some other benefits that the technology may provide:

It can save time. Tax software platforms such as Column Tax allow mobile banks and fintech companies to offer tax filing as a service more easily by using embeddable software that can interact with payroll connectivity platforms. These platforms enable gig workers to track their earnings, deductible expenses, mileage, and more through a single, intuitive dashboard. By integrating all these software solutions, gig workers reduce their tax filing from 25 hours to a single session and reduce tax preparation costs by up to $530.

It can ensure accuracy. Payroll connectivity data comes directly from the source—the gig or payroll platform—so it removes the element of human error. It’s easy for gig workers to miss relevant documents and information if they haven’t been tracking properly throughout the year. These platforms provide a solution with full earnings visibility that can catch cash flow data that even others might miss.

It can help to build client relationships. Gig workers face a lot of stress when considering their taxes and likely will want to lean on an accountant to help provide them with financial guidance and advice. Payroll connectivity helps tax professionals give their gig worker clients a great customer service experience by providing them with seamless and easy tax filing and solutions tailored to them, which will help encourage them to come back to your firm for years to come.

Gig workers often have to pay quarterly estimated taxes. It’s difficult for them to project how much they’ll have to pay, so real-time access to income data allows them to avoid a shortfall of cash when tax season comes around. Now is the time for tax software providers and accounts to invest in updating existing processes. With tax season behind us, there’s freed-up capacity to focus on the long-term vision of the tax filing process.

Accounting professionals sometimes struggle when working with independent contractors to file taxes. All pertinent earnings and mileage data, as well as documents, must be shared across multiple platforms creating the additional work of manual entry. Payroll connectivity is a tech solution for accountants that keeps all this information in one place, saving time, ensuring accuracy, and building a relationship with the client by providing them with a painless and easy tax season.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Justin Stolzenberg is general manager of strategic verticals at Argyle, the leading platform for consumer-permissioned payroll connectivity, which gives businesses fast, cost-effective access to real-time income and employment data.

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