Are You Part of the Sharing Economy?
The Sharing Economy – What Is It?
Ridesharing, apartment/home lending, peer-to-peer lending, reselling, coworking, talent-sharing… The sharing economy, has taken off in all sorts of ways. Changes in how people operate have taken over. The sharing economy allows individuals and groups to utilize technology advancements to arrange transactions to generate revenue from assets they possess – (such as cars and homes) – or services they provide – (such as household chores or technology services).
- Freelance work
- Car Sharing
- House/Home/Room Sharing
- Lending Funds
- Sharing Resources
While still an expanding issue in our economy, there are tax implications for the companies that provide the services and the individuals who perform the services. The IRS has indicated that the following tax issues may apply to those participating in the sharing economy:
Issues for Individuals Performing Services
- Filing Requirements
- Employee or Independent Contractor
- Tax Payments, Including Estimated Tax Payments
- Self-Employment Taxes
- Rules for Home Rentals
- Business Expenses
- Receiving Form 1099-K, Payment Card and Third Party Network
Issues for the Companies Providing Services
- Determining Whether the Individuals Providing Services are Employees or Independent Contractors
- Employer/Payer Employment Tax Obligations
- Reporting on Form 1099-K, Payment Card and Third Party Network Transactions
If you have any questions regarding if and how the sharing economy may affect your and your business, please don’t hesitate to contact us. Our tax specialists are always available to answer your tax questions.