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IRS Launches Gig Economy Tax Center

July 10, 2020 Priya Comments Off

The IRS has announced the launch of the new Gig Economy Tax Center on its website, to help individuals in this growing area meet their tax obligations through more streamlined information. It is intended to make it easier for taxpayers to find information about the tax implications for the companies that provide the services and the individuals who perform them in the “gig” economy, which is also known as the “sharing,” “on-demand” or “access” economy.

“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,” he added.

Educating gig economy workers about their tax obligations is vital. Many gig economy workers do not receive Form W-2s, 1099s or other information returns for their work, so they must be made aware that income from these sources is generally taxable, regardless of whether they receive information returns. Gig economy workers may also be required to make quarterly estimated income tax payments, pay their share of Federal Insurance Contribution (FICA), Medicare and Additional Medicare taxes.

The Gig Economy Tax Center offers tips and resources on a variety of topics, such as filing requirements, deductible business expenses, and special rules for reporting vacation home rentals.