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Are you part of the sharing economy? Here’s what you need to know about taxes

Source: marketwatch.com - Aug 22, 2017

The sharing economy uses the internet and other technology to facilitate transactions like car sharing (think Uber and Lyft), vacation property rentals (Airbnb), apartment rentals, freelance work and crowdfunding. Since the sharing economy is now a big deal, especially for millennials, the tax issues have become a big deal too. In reaction, the IRS launched the Sharing Economy Tax Center on its website at www.irs.gov. It provides federal tax guidance and resources to folks involved in the sharing economy. Included are tips on tax filing requirements, quarterly estimated tax payments, self-employment tax, and vacation home rental tax issues.

Tax guidance for sharing economy participants is apparently sorely needed. According to a 2016 survey by the National Association for the Self-Employed, 34% of people who reported earning income in the sharing economy didn’t know they needed to make quarterly estimated tax payments, 36% didn’t understand what records they should keep for tax purposes, 43% percent didn’t set aside money to meet their tax obligations or know how much they owed, and 69% didn’t receive any tax information from the sharing economy platform they used to earn their income. Yikes! See: NASE Releases New Survey Data On Sharing Economy.

So into the breach I step. Here are the tax basics that sharing economy participants need to know.

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Category: General Business