This past week the IRS launched a brand new Gig Economy Tax Center on IRS.gov to help people working in the gig economy understand and comply with their tax obligations. These types of roles have traditionally been referred to as independent contractors or freelancers. But as internet platforms have expanded the gig economy has expanded to include Uber drivers, Airbnb rentals, mystery shoppers, dog walkers and other service/rental apps.
“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 Tax Center provides resources for both individuals that are paid as contractors and the companies that hire them. The “Manage Taxes for Your Gig Work” section provides information to help gig workers find forms, keep records, deduct expenses, file taxes and pay them. The “Manage Taxes for a Digital Platform” section provides information for digital platforms and businesses. Here businesses can learn how to classify workers, report payments, and pay/file taxes for a digital marketplace or business.
What is Gig Work?
Gig work is certain activity you do to earn income, often through an app or website (digital platform), like:
- Drive a car for booked rides or deliveries
- Rent out property or part of it
- Run errands or complete tasks
- Sell goods online
- Rent equipment
- Provide creative or professional services
- Provide other temporary, on-demand or freelance work
Note: This list does not include all types of gig work.
What are Digital Platforms?
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
Note: This list does not include all types of digital platforms.
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Disclaimer – Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.