Hey, Uber and Lyft drivers, did you know that the snacks you serve your customers are partially tax deductible? But the snappy clothes you wear to burnish your image with your clientele aren't. Those are just two tax tidbits that many joining the ranks of the on-demand, or "gig," economy should keep in mind.
People working in the gig economy typically receive either a 1099-Misc or 1099-K, IRS forms that summarize income earned from a platform such as Uber, Lyft or TaskRabbit. The IRS can keep track of that income because they receive copies of the same forms that taxpayers receive. According to the IRS, there were over 91 million 1099 forms issued last year, the highest number on record.
ZPeople are required to report all of their income, even if they do not receive a 1099 or other tax form. If you make money as a contractor, issuers are required to report compensation of $600 or more on form 1099-Misc. Form 1099-K, the form issued by credit card merchants to report payments processed on your behalf, should be issued if your gross payments:
Exceed $20,000, and
Exceed 200 transactions within the tax year
However, even if you don’t receive these forms and make under $600 you still need to report your income to avoid penalties for failing to report income.
Courtesy of USAToday
For more information contact Neikirk, Mahoney and Smith at 502-896-2999
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