Uber, Lyft, Airbnb, Etsy, Rover, TaskRabbit. If you’ve used any of these services–or provided services for them to others–you’re a member of the sharing economy.
If you’ve only used these services (and not provided them), then there’s no need to worry about the tax implications but if you’ve rented out a spare room in your house through a company like Uber or Airbnb then you’re probably collecting a fee–a portion of which goes to the provider (in this example, Airbnb) and a portion that you keep for providing the service. But whether it’s your full-time gig or a part-time job to make some extra cash, you need to be aware of the tax consequences.
Millennials are the number one users of the sharing economy but Gen X and Boomers use it too; and a recent PWC study found that 24 percent of boomers, age 55 and older, are also providers. While many people are looking to earn a bit of extra income, some dive into it full-time hoping they can make a living, and still, others simply enjoy meeting new people or providing a service that helps people. What most people don’t realize is that this extra cash could impact their taxable income–especially if they have a full-time job with an employer. Continue reading
While The IRS, state tax agencies and numerous people in the tax and accounting industry are working together to warn tax professionals and their clients about phishing scams, they are still all too common. Here’s what you need to know about the two most recent scams: fake charities that take advantage of people’s generosity during times of natural disasters and IRS/FBI-themed ransomware.
Fake Charity Scams Relating to Hurricane Harvey
With Houston still reeling from the devastating effects of Hurricane Harvey, many people are wondering how they can help. One of the best ways to do this is by donating to a charity that helps victims affected by natural disasters. Unfortunately, however, due to the prevalence of tax scams, taxpayers need to make sure the organization they donate to is not a fake charity set up by unscrupulous criminals looking to make a fast buck or get people’s personal information. Continue reading
Of all the retirement plans available to small business owners, the SIMPLE IRA plan (Savings Incentive Match PLan for Employees) is the easiest to set up and the least expensive to manage. The catch is that you’ll need to set it up by October 1st. Here’s what you need to know.
What is a SIMPLE IRA Plan?
SIMPLE IRA Plans are intended to encourage small business employers to offer retirement coverage to their employees. Self-employed business owners are able to contribute both as employee and employer, with both contributions made from self-employment earnings. In addition, if living expenses are covered by your day job (or your spouse’s job), you would be free to put all of your sideline earnings, up to the ceiling, into SIMPLE IRA plan retirement investments. Continue reading
More than half of Millennials and Gen Xers are planning to withdraw money from their retirement plans to cover unexpected expenses such as medical bills, educational expenses, or buying a house, according to a recent PwC Employee Financial Wellness Survey (April 2017). Most notably, the survey also found that this trend is on the rise for both Millennials and Gen Xers, increasing 14 and 6 percent, respectively, from 2016 to 2017. Continue reading
From declining sales at local retail establishments to brick and mortar store closings, almost everyone would agree that the rise of Internet sales has transformed the retail landscape. One consequence of this uptick in online sales is lost revenues in states that collect sales (or use) tax.
According to the National Conference of State Legislatures, state revenues declined by $17.2 billion due to lost sales taxes in 2016 alone. As such, states, which derive as much as one-third of their revenues from sales and use taxes, are struggling to find ways to harness this lost revenue. At least two states, North Dakota and Colorado, have turned to the US Supreme Court for relief sparking other states to take action and establish legislation governing payment of sales and use tax. Continue reading
If you filed for an extension of time to file your 2016 federal tax return and you also chose to have advance payments of the premium tax credit made to your coverage provider, it’s important you file your return sooner rather than later. Here are four things you should know:
1. If you received a six-month extension of time to file, you do not need to wait until the October 16, 2017, due date to file your return and reconcile your advance payments. You can–and should–file as soon as you have all the necessary documentation.
2. You must file to ensure you can continue having advance credit payments paid on your behalf in future years. If you do not file and reconcile your 2016 advance payments of the premium tax credit by the Marketplace’s fall re-enrollment period–even if you filed for an extension–you may not have your eligibility for advance payments of the PTC in 2018 determined for a period of time after you have filed your tax return with Form 8962.
3. Advance payments of the premium tax credit are reviewed in the fall by the Health Insurance Marketplace for the next calendar year as part of their annual re-enrollment and income verification process.
4. Use Form 8962, Premium Tax Credit, to reconcile any advance credit payments made on your behalf and to maintain your eligibility for future premium assistance.
Sign up for our newsletter to receive tax tips and timely articles delivered right to your inbox. Read more articles from our September 2017 newsletter here.
The IRS offers tax relief to affected taxpayers (individuals and businesses) in any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for individual assistance and is part of a coordinated federal response to the damage caused by severe storms and flooding and is based on local damage assessments.
Currently, the following Texas counties are eligible for relief: Aransas, Bee, Brazoria, Calhoun, Chambers, Fort Bend, Galveston, Goliad, Harris, Jackson, Kleberg, Liberty, Matagorda, Nueces, Refugio, San Patricio, Victoria, and Wharton. Taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief. Continue reading