The Shared Economy & Taxes…5 Things You Need to Know!

A quickly growing area of our business economy is the online “on demand!” sector.  On demand entrepreneurs can offer anything from a car ride to a home for rent with the click of a button on a phone app in this shared economy.  As tax time approaches, there are several important things for these up and coming tycoons to keep in mind when they file:

vacation home

  1. If you earn any income via shared economy, whether it be cash only, part time, or full time, it will most likely be taxable.
  2. The plus side is that most of your business expenses can be tax deductible!  Some of these expenses include cell phones, tolls, and gas used towards your venture.
  3. Depreciation, or “wear and tear”, on your home and vehicles can be claimed for times when they are utilized for business needs.
  4. Take the time to determine whether you are considered an employee, self employed, or an independent contractor.  It will make a difference in your taxes!
  5. Home rentals must be claimed on your income tax return.  Fortunately that also allows for the possibility for more deductions in the forms of mortgage interest, maintenance, and utilities.

These tips are just a few of many provided by the IRS to those providing on demand goods or services.  More helpful links and ideas can be found at Sharing Economy Tax Center and the Shared Economy CPA.