What do social media gigs, driving for companies like Uber, and renting out spare bedrooms in your house to travelers all have in common? They are all different ways of participating in what has become known as the Sharing Economy. This is also known as the Gig, On-Demand, or Access Economy.
With the help of online platforms or mobile apps, people are able to discover jobs that cover a wide variety of skills. More and more people are participating by using more of their free time, and even using their personal cars, to make a few extra bucks on the side.
If you use your car or house through an online or mobile platform, or if you find jobs that way, it is important that you keep in mind the unique tax implications. Since it is such a new and emerging area, the IRS has set up some resources on their website to help you navigate your unique situation.
As a general rule, all income received in a sharing economy job is taxable. But, as is the case in other types of jobs, many of your expenses may be tax-deductible. Just to be sure, head over to the Sharing Economy Tax Center at IRS.gov to see what tax situations may affect you.
Will you be required to pay estimated taxes? Are you an employee or independent contractor? What forms do you need to fill out and file? Know the tax rules so that you are ready come tax time.