So far 2020 has been a year of many unexpected challenges with Covid-19. Many individuals have explored news side jobs and investments as a way to supplement their income. In this article, we take a look at income tax deductions for gig workers in the new “shared economy”.
On-demand entrepreneurs (aka “gig workers”) offer a wide range of services in the shared economy. Gig workers provide anything from a car ride via Uber to a home for rent on Airbnb, with just the click of a button.
If you earn any income via the shared economy, whether it be cash-only, part-time, or full-time, it will most likely be considered taxable income.
The plus side is that most business expenses can be claimed as income tax deductions.
Below are some different types of income tax deductions you may have not considered reporting on your taxes.
Income tax deductions for Uber drivers and other rideshare apps
- Cell phone use for business
- Tolls and gas used towards your venture
- Depreciation, or “wear and tear”, on your vehicles can be claimed for times when they are utilized for business needs.
Income tax deductions for Airbnb hosts and other home rental apps
- Cell phone use for business
- Tolls and gas used towards your venture
- Home rentals must be claimed on your income tax return. However, this allows for more deductions including mortgage interest, maintenance, and utilities.
Take the time to determine whether you are considered an employee, self-employed, or an independent contractor. It will make a difference in how you file your taxes.
These tips are just a few of many provided by the IRS to those providing on-demand goods or services. To learn more about income tax deductions for gig workers visit the Gig Economy Tax Center.
If you would like further assistance determining what expenses are eligible for income tax deductions, feel free to contact us here.