You are getting noticed.
(Maybe not the kind of attention you would like?)
According to an article in Forbes, more than a third of country’s workers participate in the gig economy.
That’s close to 60 million workers.
The gig economy, aka sharing economy, is expected to grow.
What does that mean for you, gig economy worker?
Well, among other things, it means Treasury Inspector General of Tax Administration (TIGTA) is taking notice. And so is the Internal Revenue Service (IRS).
“… we could benefit from the development of a comprehensive strategic plan to address the gig economy as well as any potential noncompliance resulting from it.”
said Mary Beth Murphy, commissioner of the IRS’s Small Business/Self-Employed Division (in response to recommendations from TIGTA).
The government tax authorities are starting to pay more attention to you.
IRS is starting to focus on your tax compliance
Aren’t you happy to finally get noticed?!
(Ok, that wasn’t funny.)
If you are a gig economy worker, you need to get comfortable with this new found “fame.”
You need to get comfortable with the idea that you may (potentially) be questioned by tax authorities.
Because you work for yourself you are now considered a small business owner.
And you are responsible to keep track of your income and expenses.
Here are 3 key points for you to remember:
Don’t discard any 1099 form that you receive. YES, you guessed it — the IRS gets a copy too.
1099 or not, you need to keep track of any business-related payments you receive.
And include them in your income when filing.
Make sure you keep good records of your deductible (business-related) expenses.
Deductible expenses may include exchange fees, office equipment and supplies, home office deduction, payment processing fees, and other expenses you incur as you derive your income.
Important: make sure you have documents to prove all the expenses you claim.
And remember: personal expenses are not deductible.
Keep them separate from business expenses.
You now have the “privilege” of paying your own taxes.
(Welcome to the self-employed world.)
Your tax responsibilities may now require that you pay estimated taxes.
Otherwise, when you get ready to file you’ll get the “surprise” — a large tax bill.
With penalties and interest.
Whatever your gig is, as long as you remember to keep good records, and pay your taxes when due, then it should be smooth sailing.
Congratulations on being a new business owner!
Wishing you success in all you do.
Thanks for visiting.