Have you ever taken a ride with Uber? How about Lyft? Or have you used Airbnb to make your lodging reservations? If so, then you are a part of the Sharing Economy. The use of online sharing services to make travel, commuting, or other arrangements has gained popularity over the past few years. Some even say that Uber and Airbnb are the largest taxi and accommodation services in the US, if not the world.
And the IRS is paying attention.
If you are one of these service providers – an Uber driver or an Airbnb host – the IRS wants you to know that you may have a tax filing requirement. Here’s what the IRS has to say:
“…if you receive income from a sharing economy activity, it’s generally taxable even if you don’t receive a Form 1099-MISC, Miscellaneous Income, Form 1099-K, Payment Card and Third Party Network Transactions, Form W-2, Wage and Tax Statement, or some other income statement. This is true even if you do it as a side job or just as a part time business and even if you are paid in cash. On the other hand, depending upon the circumstances, some or all of your business expenses may be deductible, subject to the normal tax limitations and rules.”
The IRS has added a new section to their website to help taxpayers identify the tax issues that may arise from providing services for a sharing economy activity. The IRS page also includes numerous links to other topics that might arise in the course of providing sharing services.
The new IRS page can be found at:
Your HW&Co. advisor can help you sort through the issues. Give us a call if you would like to discuss how the rules might affect your tax obligation.