Note to Editor: This is the third in a series of reminders to help taxpayers prepare for the upcoming tax filing season.
IR-2016-153, Nov. 23, 2016
WASHINGTON – As tax filing season approaches, the Internal Revenue Service wants taxpayers who are self-employed or involved in the sharing economy to know about free resources that are available to help them with their taxes.
Sole proprietors and independent contractors can get helpful information from the IRS Small Business and Self-Employed Tax Center. This resource includes online tools such as the Tax Calendar for Businesses and Self-Employed, which has key tax dates and necessary actions for each month of the year.
For those who provide services to consumers, such as rides in personal vehicles for a fee or the use of property, such as apartments or homes for rent, the IRS created the Sharing Economy Resource Center. It has tips such as:
- Income is generally taxable, even if the recipient does not receive a Form 1099, W-2 or some other income statement, but some or all business expenses may be deductible.
- There are some simplified options available for deducting many business expenses.
- People involved in the sharing economy often need to make estimated tax payments during the year to cover their tax obligation.
- Alternatively, people involved in the sharing economy who are employees at another job can often avoid needing to make estimated tax payments by having more tax withheld from their paychecks. The Withholding Calculator on IRS.gov can also be a helpful resource.
The IRS also holds Small Business Events, workshops and seminars, at many locations throughout the country. Topics include paying self-employment and income tax on any net profit, how to make estimated tax payments on income that is not subject to withholding, which expenses can be deducted as business expenses, and much more. The IRS Video Portal also has videos and webinars on many tax topics that may be helpful.