As the sharing economy way of life becomes more mainstream, more people are making primary or secondary incomes by renting their rooms on Airbnb, crowdfunding on Kickstarter, offering a ride through Lyft, or picking up an odd-job on TaskRabbit. But the issue of how to report income remains unclear for many sharing economy workers.
1099.is, a new open-source resource for working freelancers spearheaded by Collaborative Fund, helps demystify some common questions about how to stay accountable and protect yourself against potential IRS audits by correctly filing your taxes.
In the process of meeting with dozens of participants in the Sharing Economy – from crowdfunding platforms, car & ride-sharing startups, freelance writers, designers, and coders – we heard the same complaint: taxes are a constant source of uncertainty and pain for all parties involved. Working for yourself has different tax implications than the standard, employer-facilitated W-2 filing. The self-employed are at greater risk of an IRS audit, making accurate filing critical.
Some sharing economy startups provide tax resources for users—Airbnb, for example, will mail you a 1099, the U.S. tax form required for any self-employed worker (such as an Airbnb host). But 1099.is aims to address general topics applicable to any sharing economy venture, such as which expenses are deductible, or how much of your sharing economy-based income you need to report to the IRS (spoiler: all of it). However, 1099.is stresses it's not a tax advice site, nor is it a substitute for a certified tax professional.
[Image: Flickr user 401(K) 2013]