TaskRabbit Taxes in Kentucky - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for TaskRabbits in Kentucky

From helping folks move in Lexington to assembling furniture in Louisville, being a TaskRabbit in Kentucky offers flexibility and income. However, that income comes with tax responsibilities. As an independent contractor, you're considered self-employed by the IRS, meaning you're responsible for reporting all earnings and paying applicable taxes.

The IRS requires all self-employed individuals to report income and expenses on Schedule C (Profit or Loss from Business) when filing Form 1040. Crucially, income over $400 requires the payment of self-employment taxes, covering both Social Security and Medicare contributions. Platforms like TaskRabbit do not withhold these taxes, so proactive tax planning is essential.

How Kentucky Handles Gig Worker Taxes

As a resident of Kentucky, you are required to file a state income tax return, even if your federal tax liability is zero. Kentucky operates under a flat income tax rate, currently at 4.0% for the 2025 tax year. This means all taxable income is taxed at the same rate. Self-employed individuals in Kentucky will primarily use Form 740, Kentucky Income Tax Return for Individuals, to report their income. Specifically, Schedule G, Income from Business, Profession, or Farm, is used to detail income and expenses related to your TaskRabbit work, mirroring the federal Schedule C. Kentucky also allows for a deduction for the federal income tax paid, which can help reduce your state tax liability. Remember to keep meticulous records of all income received through TaskRabbit and all related business expenses. Kentucky’s Department of Revenue offers resources and guidance for self-employed individuals; you can find more information at the Kentucky Department of Revenue website. It's important to note that Kentucky does not currently have a separate self-employment tax like the federal government, but your federal self-employment tax will impact your overall tax situation. Accurate reporting of your income and expenses is vital to avoid potential penalties or audits.

Top Tax Deductions for Kentucky Drivers

• Standard Mileage: The #1 deduction for TaskRabbits. The 2025 rate is 70 cents per mile. Given Kentucky’s relatively moderate gas prices, the standard mileage rate is often a very beneficial option, simplifying record-keeping.
• Tolls & Parking: While Kentucky doesn’t have extensive toll roads, any tolls incurred while performing TaskRabbit tasks are deductible. Parking fees directly related to your work are also deductible.
• Phone & Data Plan: If you use your phone for scheduling tasks, communicating with clients, or navigating, you can deduct the percentage of your monthly bill attributable to business use.
• Vehicle-Related Costs: Expenses like car cleaning supplies, phone mounts for hands-free operation, or insulated bags for food delivery (if applicable) are deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses like gas or repairs in the same year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

This tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Because TaskRabbit and similar platforms classify you as an independent contractor, they do not withhold these taxes from your earnings. Therefore, it’s your responsibility to calculate and pay this tax, typically through estimated tax payments made quarterly to the IRS. Failing to do so can result in penalties.