Participating in the Sharing Economy Can Affect Taxes

1. Participating in the Sharing Economy Can Affect Taxes www.etservicesva.com

2. In 2017, many taxpayers use their phones and computers to provide services and sell goods. This includes the use of sites and apps to rent a home to travelers, sell crafts, or to provide car rides. Taxpayers who do this may be involved in the sharing economy. Participating in the sharing economy may affect a person’s taxes. www.etservicesva.com

3. Here are six things taxpayers should know about how the sharing economy might affect their taxes: • Taxes - Sharing economy activity is generally taxable. This includes: Part-time work, a side business, cash payments received and income stated on a form 1099 or form w-2. • Deductions - Some taxpayers can deduct their business expenses. For example, a taxpayer who uses a car for business use often qualifies to claim the standard mileage rate. www.etservicesva.com

4. Rentals - Special rules apply to a taxpayer who rents out a home or apartment, but who also lives in it during the year. • Estimated Payments - Taxpayers can pay as they go, so they don’t owe. One way that taxpayers can cover the tax they owe is to make estimated tax payments during the year. These payments can help cover their tax obligation www.etservicesva.com

5. Payment Options – The fastest and easiest way to make estimated tax payments is through IRS Direct Pay and Treasury Department’s Electronic Federal Tax Payment System.   • Withholding - Employees involved in the sharing economy might want to review their withholding from their job. They can avoid making estimated tax payments by having more tax withheld from their regular paychecks. www.etservicesva.com

6. Essential Tax Services 13168 Piedmont Vista Drive Haymarket, VA USA Zip: 20169 PH: 703-754-2601