by Mike Godfrey, Tax-News.com Washington
15 January 2020
On January 9, 2019, the United States Internal Revenue Service announced the launch of a new Gig Economy Tax Center, which is intended to help taxpayers meet their tax obligations through more streamlined information.
As noted by the IRS, the gig economy, also known as the sharing or on-demand economy, usually includes businesses that operate an app or website to connect people to provide services to customers. The most popular gig economy activities are ride-sharing and home rentals.
However, the IRS pointed out that income from gig economy sources is generally taxable, regardless of whether workers receive information returns. This is the case even if the work is full-time, part-time, or if the person is paid in cash, the agency added.
Furthermore, 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 if they are employees, and pay self-employment taxes if they are not considered to be employees.
The IRS said that the new center simplifies various resources, making it easier for individual and business taxpayers to find information relevant to their circumstances, including:
- filing requirements;
- making quarterly estimated income tax payments;
- paying self-employment taxes;
- paying FICA, Medicare, and Additional Medicare;
- deductible business expenses; and
- special rules for reporting vacation home rentals.