Participating in the Sharing Economy Can Affect Taxes

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Participating in the Sharing Economy Can Affect
Taxes
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In 2017, many taxpayers use their phones and
computers to provide services and sell goods.
This includes the use of sites and apps to rent a
home to travelers, sell crafts, or to provide car
rides. Taxpayers who do this may be involved in
the sharing economy. Participating in the sharing
economy may affect a persons taxes.
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Here are six things taxpayers should know about
how the sharing economy might affect their taxes

• Taxes - Sharing economy activity is generally
  taxable. This includes Part-time work, a side
  business, cash payments received and income
  stated on a form 1099 or form w-2.

• Deductions - Some taxpayers can deduct their
  business expenses. For example, a taxpayer who
  uses a car for business use often qualifies to
  claim the standard mileage rate.

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• Rentals - Special rules apply to a taxpayer who
  rents out a home or apartment, but who also lives
  in it during the year.
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• Estimated Payments - Taxpayers can pay as they
  go, so they dont owe. One way that taxpayers can
  cover the tax they owe is to make estimated tax
  payments during the year. These payments can help
  cover their tax obligation

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• Payment Options The fastest and easiest way to
  make estimated tax payments is through IRS Direct
  Pay and Treasury Departments Electronic Federal
  Tax Payment System.  

• Withholding - Employees involved in the sharing
  economy might want to review their withholding
  from their job. They can avoid making estimated
  tax payments by having more tax withheld from
  their regular paychecks.

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Essential Tax Services 13168 Piedmont Vista
Drive Haymarket, VA USA Zip 20169 PH
703-754-2601