Tips for taxpayers who work in the gig economy

Business Tax Return in Houston

The gig economy allows people to earn income by using technology to arrange transactions. This could include performing rideshare services or deliveries, renting out property, selling goods online, or providing freelance work. Often, customers and providers of goods or services are brought together through a digital platform on an app or website.

It's important for all gig economy workers to understand their tax obligations.

Here are some things taxpayers should remember:

They must report all income, even if the income is:

• From part-time, temporary, or side work
• Not reported on a Form 1099-K, 1099-NEC, 1099-MISC, W-2, or other information return.
• Paid in the form of cash, property, goods, or virtual currency

Taxpayers may also be required to make quarterly estimated income tax payments and pay self-employment tax.

While providing gig economy services, it is important that the taxpayer is correctly classified.

• It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors.
• Taxpayers can use the worker classification page on IRS.gov to determine how they are being classified.
• Independent contractors may be able to deduct business expenses, depending on tax limits and rules. It is important for taxpayers to keep records of their business expenses.

It's important for taxpayers to pay the right amount of taxes throughout the year to avoid owing when they file.

• An employer typically withholds income taxes from their employees' pay to help cover income taxes their employees owe.
• Gig economy workers, who are not considered employees, have two ways to cover their income taxes:
  
  • If they have another job as an employee, gig workers can submit a new From W-4 to their employer to have more income taxes withheld from their paycheck.
  • Make quarterly estimated tax payments to help pay their income taxes throughout the year, including self-employment tax.

The Gig Economy Tax Center on IRS.gov answers questions and helps gig economy taxpayers understand their tax responsibilities.

Contact: 📞281-861-7718 📍4654 Hwy 6, Houston, TX 77084

Source: IRS

Alfredo Gaxiola has worked on numerous IRS problem cases and has successfully settled with the IRS to release liens on houses, bank accounts and wages and, if needed, setting a payment installment plan that is not burdensome for the client. He has conducted appeals before the U.S. Tax Court and obtained favorable resolutions in reducing the tax debt of his clients. Mr. Gaxiola served as Treasurer of Camara de Empresarios Latinos, one of the largest and strongest Hispanic organizations in the city of Houston. He has conducted financial and accounting seminars for the Houston Small Business Development Corporation, as well.

Business Tax Return in Houston

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