Pooling resources among citizens is quickly becoming an effective way to reduce cost, and make ends meet during trying financial times. Households are discovering that sharing capabilities such as transportation and lodging can relieve financial pressures of day to day living. This model allows everyday people an opportunity to capitalize on owned assets to produce incremental revenue. Both seller and consumer are winning as these services are increasing choice at generally more attractive prices. Car rental, vacation housing and urban transportation, to name a few, are leading the way.
The IRS has launched new and supportive guidelines on these businesses designed to assist the sharing community in maintaining these efficient, easy and effective services. The idea is to inspire other sharing programs that support the needs of communities and cities throughout the United States.
If you are one of these providers, it is important to know that money received from providing services is taxable, even if a Form 1099 or W-2 is not issued. There are various deduction options for people who either rent a room in their home, share business space or use their vehicle to taxi people from one location to another.
It is important to get familiar with the new guidelines or get help from a tax professional that you trust. Payment options vary depending on the needs of the taxpayer and there are benefits provided by the IRS…if you know where to look.
As this complicated network expands, the IRS Sharing Economy Resource Center will be forced to evolve and tax implications will follow. As always, TaxLane assists taxpayers in understanding and meeting their tax responsibilities. A lot of people fall behind and need help getting caught up or dealing directly with the IRS. When it comes to tax debt, knowing what to do when makes all the difference. We are here to help if you need it.