- IRS launches new Gig Economy Tax Center on irs.gov to help workers meet their tax obligations.
- User-friendly streamlined information for gig workers, digital platforms and businesses.
- List of other resources and related tax centers.
The Internal Revenue Service recently launched a new Gig Economy Tax Center on IRS.gov to help people in this growing area meet their tax obligations by providing more streamlined information.
“The IRS developed this online center to help taxpayers in this emerging segment of the economy,” said IRS Commissioner Chuck Rettig. “Whether renting out a spare bedroom or providing car rides, we want people to understand the rules so they can stay compliant with their taxes and avoid surprises down the line.”
The gig economy is also known as the sharing, on-demand or access economy. It usually includes businesses that operate an app or website to connect people to provide services to customers. While there are many types of gig economy businesses, ride-sharing and home rentals are two of the most popular. Other examples of gig work activities resulting in earned income include:
- Driving a car for booked rides or deliveries
- Renting out property or part of it
- Running errands or complete tasks
- Selling goods online
- Renting equipment
- Providing creative or professional services
- Providing other temporary, on-demand or freelance work
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In addition, digital platforms are businesses that match workers’ services or goods with customers via apps or websites. This includes businesses that provide access to:
- Ridesharing services
- Delivery services
- Crafts and handmade item marketplaces
- On-demand labor and repair services
- Property and space rentals
Educating gig economy workers about their tax obligations is vital because many don’t receive form W-2s, 1099s or other information returns for their work in the gig economy. However, income from these sources is generally taxable, regardless of whether workers receive information returns. This is true even if the work is fulltime, part-time or if the person is paid in cash. Workers may also be required to make quarterly estimated income tax payments, pay their share of Federal Insurance Contribution (FICA), Medicare and Additional Medicare taxes if they are employees and pay self-employment taxes if they are not considered to be employees.
The Gig Economy Tax Center streamlines various resources, making it easier for taxpayers to find information about the tax implications for the companies that provide the services and the individuals who perform them.
It offers tips and resources on a variety of topics including:
- filing requirements
- making quarterly estimated income tax payments
- paying self-employment taxes
- paying FICA, Medicare and Additional Medicare
- deductible business expenses
- saving receipts for expenses to lower to lower the amount of taxes owed
- keeping records of money received from gig work and sales
- special rules for reporting vacation home rentals
For more information, check out the new Gig Economy Tax Center on IRS.gov.
For other streamlined tax centers by industry or topic, check out the following on irs.gov: