Why did they pick on the gig economy?
It wasn’t too many years ago that if somebody said “I’ve got some great gigs lined up,” they owned a guitar and could play classic country or some great blues. Not quite so simple, says the IRS; gigs are part of the Sharing Economy.
And what’s a Sharing Economy?
This area of commerce describes those activities that generate income from your assets such as cars, bicycles, your home and other physical assets; as well as in the performance of many other activities. Businesses of this type, also referred to as on-demand, gig, or access economies, usually use the Internet to arrange these services, assets, or transactions, and to connect workers and businesses for short-term work.
What’s this mean?
Basically, it means the IRS is figuring out how to get into your gig. The IRS says if you use one of the many online platforms available to rent a spare bedroom, provide car rides, or to connect and provide a number of other goods or services, whether payment is received in the form of money, goods, property or services, you’re involved in the sharing economy.
Possibly. One of the common denominators of businesses in the sharing economy is the Internet. When a business is considered part of the sharing or gig economy, whether that business provides household cleaning to technology services, questions relative to the nexus of that business are up for redefinition and interpretation.
In its enthusiasm to help taxpayers meet their obligations, in mid-2016 the IRS launched their Sharing Economy Resource Center, providing tips for this emerging business area. It’s as good a read now as it was then.
What’s the bottom line?
If you’re not sure whether your business or service is part of the sharing economy, that’s plenty of reason for us to talk. Remember, the IRS has its own code. A down-to-earth translation of one section ends up something like this: “We’re right, you’re wrong. If you don’t like it, prove it.”
Let’s get together. We’ll find out where you and your business stand with this gig economy issue. There’s still time to adjust your tax strategy.
Here’s the number: 479-478-6831
More about the Nexus
The IRS says this about Sharing Economy Tax Center