Unpredictable is the word that best describes the current economic climate right now. Are we heading toward a recession? Will interest rates or inflation calm down? What about geopolitical events? This year has been full of questions that impact how you—and your team of independent contractors—run your business.
While we don’t know exactly what will happen in the next year, a few developments have offered some clarity for businesses that run on independent contractors. We asked our expert team to peer through their crystal balls to tell us what their predictions for next year around the gig economy, tax policy, and more. Here’s what they told us:
The gig economy will expand, giving you a greater pool of independent contractors
One thing our expert panel agreed on: The gig economy—a catch-all term describing 1099 work that includes consulting, freelance services, food service delivery, telehealth, and digital-to-consumer platforms like Uber or TaskRabbit—is only getting larger. At least 41 million people in the United States did some form of gig work in 2024, or between 25-36% of workers, depending on who you ask.
“The gig economy as a whole will only continue to grow,” says Kerri Florian, Senior Accounting Manager. Business Insights projects that the gig economy will triple from $5.7 billion in 2024 to over $1 trillion by 2032, with a forecasted CAGR of 16.18%. We won’t see all of that growth in one year, but it’s clear that the gig economy isn’t just here to stay, it’s a powerful force with high demand from both businesses and workers.
As more companies double down on return-to-office, we’ll likely see more workers consider contracting to remain more flexible and with remote options in the future. “More workers will choose contracting over W-2 roles to gain flexibility and maximize earnings,” says Al Goldklang, Technical Account Manager.
The new administration will change the regulatory environment around independent contractors, creating ripple effects
Even thirty years ago, most people associated hiring an independent contractor with construction. Now, anyone with a smartphone can participate in the gig economy in one way or another, from picking up groceries to running insurance claims. Says Chief Technology Officer Greg Francyk, “The government recently unified their guidance on what makes an independent contractor truly an independent contractor by clarifying the “ABC test,” but that’s still making its way through the system today. We’re going to continue to see different industries test the boundaries of what’s allowed with independent contracting as more industries continue to modernize their practices and go digital.”
The Trump administration has already promised to eliminate government regulations across a variety of industries. While it’s impossible to know what promises will translate into real political action, it’s likely that we’ll see the removal of federal regulations and changing state-level regulations, which will create some confusion in the short-term.
“A lighter regulatory framework will help the gig economy expand, including a loosening of the ABC test application,” says Jason Krigsfeld, Solutions Engineering Lead. “However, companies will face increased legal complexities at the state level, influencing where and how they scale their operations. Despite loosening federal regulation, the country will become a mosaic of patchworks. We’ll also see an increasing number of globally based independent contractors, partially in reaction to the recent presidential election, but also to capitalize on favorable cost-of-living adjustments, enhanced work-life balance, and supportive tax policies abroad.”
This trend will redefine contractor management, with companies needing to navigate complex cross-border compliance and payroll structures to stay competitive.
An upcoming big-ticket tax bill could impact 1099 filing in the future
The Tax Cuts and Jobs Act is on the agenda for Congress to address in 2025. Originally passed in 2017, the act changed deductions, expensing, and tax credit rules for businesses, and the new bill may include new rules for 1099-NEC filers as well.
While it’s unclear what provisions may stay and what regulatory changes will happen, a Republican-led Congress usually means you can expect tax cuts. Trump has already talked about tipped workers and overtime work, but only time will tell what regulations go forward—and what goes into effect immediately or over time.
Kerri hopes that this bill will help make it easier for companies using 1099 talent to file. “I’m hoping for more favorable tax treatments for contractors, like more write-offs or other benefits that haven’t materialized in the past,” she says.
To attract better talent, businesses will offer more contractor benefits
W2 benefits have long been a part of finding the best talent for your team, from offering basic health insurance to special perks like on-site massage therapy, free lunches, or luxurious team retreats. While it’s important to show your full-time employees the love, don’t forget about your 1099 team, too.
Consider offering a wide range of benefits for your contractors, like:
- Instant payouts and/or a clear payment schedule
- Automatic invoicing and billable hour software
- Access to vision, dental, and health insurance marketplace
“Companies are going to continually increase leveraging gig workers for specialized tasks, enabling access to diverse talent pools and cost-effective solutions,” says Ashton Jones, Marketing Demand Generation Lead. “This approach allows businesses to remain agile and responsive to market demands. However, the growth in contracted workers will lead to continued conversations that focus on providing gig workers with benefits such as healthcare and retirement plans. Future policies may introduce new protections to enhance worker security within the gig economy.”
“Businesses will prioritize contractor-first practices like transparent pay and professional growth to attract top talent,” Al agrees.
Wingspan can help you take your business to the future
We don’t have all the answers about what next year will look like for your business—but we do know that with the right tools, you can effectively manage your independent contractors to help you grow. Wingspan gives you a modern payroll designed for businesses that run on contractors, including automatic invoicing, 1099 filing, and 24/7 support.
