Contributed by: KristineS, FreeTaxUSA Agent, Tax Pro
Do you make money part-time online through platforms like FiVRR, Etsy or eBay? Did you create an App that’s earning you money every time it’s used? Or maybe you’re running a full-time retail shop through Amazon, renting out a spare room in your house, or letting others drive your car through Turo. If so, you’re considered part of the gig economy.
Turning your skills and creativity into a business can be financially rewarding. However, it also comes with certain tax responsibilities. These may include everything from paying quarterly estimated tax payments, obtaining an EIN (Employer Identification Number), and filing a Schedule C with your tax return, to opening a separate business bank account to avoid co-mingling personal and business finances.
If you don’t have time to read self-help tax books or have a trusted tax professional you can rely on for information, where else can you go to find help?
Gig economy tax center
Fortunately, the IRS has an answer. They’ve created the Gig economy tax center. It’s a comprehensive website with a wealth of information and resources for individuals in the Gig economy needing answers to their questions.
The tax center’s landing page explains:
- How gig work is taxable,
- How to manage your tax obligations,
- What constitutes gig work, and
- The importance of digital platforms.
The site includes a link to an informative one-pager on things to know and provides guidance for those working through digital platforms. It also includes information on the more traditional types of gig work such as rideshare, equipment rental, and on-demand or freelance work.
Specific descriptions are included for keeping records, paying estimated tax, what you need to get ready to file your taxes, and of course, filing your tax return.
Every year, thousands of gig economy customers across the country use FreeTaxUSA software to prepare and file their federal and state tax returns. And for those that want or need a little extra support, we offer two levels of optional, higher-level service. Our goal is to ensure you feel 100% confident and comfortable in filing your tax return.