In the midst of a booming economy and thousands upon thousands of entrepreneurs entering the market each year, the IRS found the need to create an online Gig Economy Tax Center.
The launching of this center has since made a wonderful and beneficial impact on many, as it was made with the sole purpose of helping and supporting tax-paying entrepreneurs.
What is it?
Understanding ones tax obligations is essential to handling finances for any business, big or small. According to CBIA, “the newly formed tax center offers various resources, making it easier for taxpayers to find information about tax obligations for the companies that provide the services and the individuals who perform them.” Some tips and resources include paying self-employment taxes, deductible business expenses, and special rules for reporting vacation home rentals.
Why was it created?
The income received from outsourced work, and projects completed by entrepreneurs or independent contractors, is subject to taxes. Considering majority of these workers are paid by project, the exchanging of tax information such as W-2’s or 1099 forms does not seem entirely essential and is definitely not a top-of-mind thought when discussing new or completed work; with this being said, more times than not, these workers miss or avoid asking this vital information only to realize it later.
With new resources and a place for specific information to be asked or found, taxpayers who are a part of the gig economy are more aware, more knowledgeable, and more prepared in terms of their professional finances.
Who is it for?
Once again, the online tax center was specifically created for entrepreneurs, independent contractors, and others who are a part of the gig life. Working for yourself, you are required and expected to handle not only all day-to-day business decisions, but also more importantly, your finances.
These individuals joined the gig economy, more than likely, to make their work life simpler, better, more efficient, or all of the above—but does their financial standing speak the same? Is it as easy for an entrepreneur or independent contractor to keep up with, manage, and report taxes than it is for other companies or businesses? With the new tax center, this is now all possible.
How does it help these people?
Those who work for companies such as Uber and AirBnB are already seeing the benefits and impact. The IRS Commissioner Chuck Rettig stated, “whether renting out a spare bedroom or providing car rides, we want people to understand the rules so they can stay compliant with their taxes and avoid surprises down the line.”
With this being said, it is obvious that this tax center was created with more than just a purpose to provide resources and tools in hopes of simultaneously encouraging more “giggers” to pay closer attention to their filing of taxes; this tax center was made intentionally to provide support and reassurance to all who are a part of the gig economy and for all “giggers” who struggle with handling taxes. For all workers who do not send or receive taxing information… now is your chance to hop on the legal bandwagon.
How can you get involved?
If you are in the gig economy, you need to get involved. Talk with your clients and be sure to ask for the necessary information. With all new resources, every taxpayer has the capability of creating a seamless approach to their business finances. Start by diving deeper into the details of the new Gig Economy Tax Center. Remember, this was made to help YOU.