Shared Economy Tax Help From IRS

By John Ams posted 08-26-2016 02:14 PM

  

The IRS has launched a web page providing informal guidance for individuals and groups using technology to generate income through vacation rentals and ridesharing services.
 
The web page, dubbed the Sharing Economy Resource Center, provides tips to help people meet their tax reporting obligations, the Internal Revenue Service said in an August 22 news release.

"This rapidly evolving area often presents new challenges for people engaged in these economic activities, whether they are renting a room or providing a ride," IRS Commissioner John Koskinen said. "The IRS is working to help people in this area by providing them the information and resources they need to file accurate tax returns."
 
The IRS is providing the guidance because many individuals engaged in these activities are unaware of the tax consequences when they accept payment.  The news release highlighted some tax compliance issues facing those engaged in on-demand business activities, such as reminders that:

  • Individuals usually owe tax on any income even if they do not receive a Form 1099, W-2 or other income statement
     
  • Special rules apply to rental income from a home, apartment or other residence used by a taxpayer during the taxable year; and
     
  • Individuals who participate in the sharing economy often need to make quarterly estimated tax payments because the "U.S. tax system is pay-as-you-go."
A copy of the IRS new release, which contains a link to the Sharing Economy Resource Center, is available here.
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