The world of consumer business is shifting. Some experts call it a “sharing economy” wherein consumers can “share” a ride or “share” someone’s home for a vacation. However some experts refer to it as an “access” economy where consumers are paying to access someone else’s goods or services.
No matter what it’s called, it is creating a lot of independent business entrepreneurs.
The IRS has a new web page to help people and businesses understand these tax implications.
This means if you receive income from this type of economy activity, it’s generally taxable even if you don’t receive a Form 1099-MISC, Miscellaneous Income, Form 1099-K, Payment Card and Third Party Network Transactions, Form W-2, Wage and Tax Statement, or some other income statement. This is true even if you do it as a side job or just as a part time business and even if you are paid in cash. On the other hand, depending upon the circumstances, some or all of your business expenses may be deductible, subject to the normal tax limitations and rules.
The IRS encourages taxpayers working in these areas to understand the potential tax issues affecting them. The IRS is providing additional information to help people, and many tax professionals with tax issues and questions related to this emerging area.