TaskRabbit Taxes in Tennessee - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for TaskRabbits in Tennessee

From assembling furniture in Nashville to helping with moving in Memphis, TaskRabbit offers flexible income opportunities across the Volunteer State. However, that flexibility comes with tax responsibilities. As an independent contractor through TaskRabbit, earnings are considered self-employment income, requiring diligent record-keeping and accurate tax filing.

The IRS requires all self-employed individuals, including TaskRabbits, to report income and expenses on Schedule C (Profit or Loss from Business) with Form 1040. Crucially, this income is also subject to self-employment tax, covering both Social Security and Medicare taxes, which are not automatically withheld from your TaskRabbit payments. Failure to account for these taxes can result in penalties and interest.

How Tennessee Handles Gig Worker Taxes

Tennessee offers a uniquely favorable tax climate for independent contractors. The state boasts no state income tax, meaning TaskRabbits won’t face a state-level income tax return requirement. However, this does not exempt earnings from federal income and self-employment taxes. Tennessee does collect sales tax on certain services, but generally, the tasks performed through TaskRabbit – such as handyman work, moving help, or furniture assembly – are not subject to sales tax. It’s always best to confirm with the Tennessee Department of Revenue if you are unsure about the taxability of a specific service. Many TaskRabbits in the Knoxville area, for example, find themselves performing a variety of tasks, and understanding the nuances of service taxability is important. Furthermore, while Tennessee doesn’t have a state income tax, it does have franchise and excise taxes that may apply if your TaskRabbit business grows into a more formal entity. Staying informed about these potential changes is crucial for long-term financial planning. For the most up-to-date information and resources, please visit the Tennessee Department of Revenue.

Top Tax Deductions for Tennessee Drivers

• Standard Mileage: The #1 deduction for most TaskRabbits. The 2025 rate is 70 cents per mile. Given Tennessee’s relatively stable gas prices compared to states like California, the standard mileage rate is often the most advantageous method for calculating vehicle expenses.
• Tolls & Parking: While Tennessee doesn’t have extensive toll road networks, any tolls incurred while performing TaskRabbit tasks are deductible. Parking fees directly related to task completion are also deductible.
• Phone & Data Plan: If you use your phone for scheduling tasks, communicating with clients, or navigating to job sites, you can deduct the percentage of your monthly bill attributable to business use.
• Vehicle-Related Costs: Consider deducting expenses like car cleaning supplies (to maintain a professional appearance for clients), phone mounts for safe navigation, or insulated bags for delivering groceries or food items.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses like gas, oil changes, 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. Unlike traditional employment, TaskRabbit (and other gig platforms) does 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 lead to underpayment penalties.