Taxing the Gig Economy

January 30, 2020

Working a gig? Check out the IRS Gig Economy Tax Center recently created to help self-employed individuals get their taxes right.

What’s the Gig Economy, you ask?
Not a new concept, rather just rebranding in a trendy fashion the work of contractors, part-timers, or side jobs that receive compensation in a different manner than traditional employees.  To some, the term “gig” stems from side-gig, as referring to a second job, and to others it represents the new digital age of work being performed on demand using apps or the web, as we have seen with the rise of Uber and Airbnb. 

Either way you put it, these gigs bring in money. And when you have income, you inevitably deal with the taxman, even when that income is in the form of property, goods, or virtual currency instead of cash.

How Do I “Deal with the Taxman”?
A question we all face, but don’t fear – the fact that you’re reading this is a great start!  The IRS gives 4 easy steps to manage your taxes:

  1. Keep Records
  2. Pay Estimated Taxes
  3. Get Ready to File
  4. File Your Tax Return

It’s a good idea to get some help from a competent tax advisor, especially in the beginning, to set yourself up for success. And as is with the rise of the gig worker comes the ability to find all kinds of relevant information online. Here are three pertinent IRS Publications to peruse:

Publication 535 Business Expenses

Publication 583 Starting a Business and Keeping Records

Publication 527 Residential Rental Property (Including Rental of Vacation Homes)

Good luck!

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