Weekly Column: Cutting Red Tape And Tax Burden For Idaho's Self-Employed Workers

Guest column submitted by U.S. Senator for Idaho Mike Crapo
Self-employment requires far more than hanging up a sign and selling a product or providing a service. Regulations are read and re-read, paperwork is filed and professional advice is often sought to ensure the business is in compliance with local and federal tax law. The learning curve can be intimidating, but the Working Families Tax Cuts not only provide permanent tax relief but also make it easier for gig workers and entrepreneurs to file their taxes and plan for their financial future.
From a mom selling fresh sourdough baked in her home, to a dad selling greens at a farmers’ market, or another selling her accounting services to small businesses, or yet another selling his paintings at local art gatherings, self-employed workers contribute significantly to our society and economy. They make daily life easier and more vibrant for all our communities.
As the Mercatus Center reports, “In today’s economy, over 160,000 Idaho residents are freelancers, contractors or self-employed workers. They include rideshare and delivery drivers, truckers, freelance creatives, real estate agents, hairstylists, childcare providers, professional consultants and countless other occupations. U.S. Census Bureau data show that this is a growing workforce, generating over $9 billion annually in revenue or sales for the state.”
Enabling small businesses to expand and do well was a key factor in developing this legislation, and we succeeded. For example, more than 25.9 million small businesses now have increased confidence thanks to a now permanent 20 percent small business deduction. The National Federation of Independent Business reports permanence has led to 16 percent of owners saying now is a “good time to expand,” a significant jump from previous months. Additionally, 55 percent of small business owners reported making capital outlays, with many investing in new equipment, vehicles and expansion of facilities.
The Working Families Tax Cuts lighten the paperwork burden for these job creators by replacing Democrats’ onerous Internal Revenue Service (IRS) reporting requirements that forced third-party networks, like Venmo and PayPal, and people who hire independent contractors to file paperwork reporting small payments to casual sellers and service providers—requirements that threatened to overwhelm both taxpayers and the IRS. Specifically, the law repealed the $600 reporting requirement for payments through third-party networks. It also increased the IRS Form 1099-MISC and 1099-NEC reporting thresholds for small businesses and independent contractors to $2,000.
The millions of Americans who receivetipscan now deduct up to $25,000 of qualified tips. For the self-employed in service industries and other relevant fields, this means they can choose how to spend or save more of their hard-earned money.
These provisions are in addition to permanently lower tax rates, which prevented the largest tax hike in history. Now, the self-employed, like all Americans, have more certainty concerning lower federal tax rates, providing more stability for financial planning.
Small businesses and entrepreneurs help keep our economy dynamic and growing. Cutting red tape and providing permanent tax relief spares them the burden of managing unnecessary tax paperwork and protects all Americans from intrusive supervision. Now, self-employed workers across the country can spend less time complying with regulatory and tax burdens and more time working hard for their loved ones, businesses and communities.
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