As early retirement and quasi-retirement are easier than ever in our expanding “sharing economy”, the IRS is clarifying the rules on how much you need to share with your least favorite Uncle. For many people “sharing economy” jobs are their real jobs, for others, a way to fill time during retirement or as an adjunct to early retirement.
The goal here is to drive taxes to zero. The “sharing economy” has several opportunities to earn thousands of dollars per year and legally not report it on your tax return. In cases where you are required to report the income we can use tax strategies to significantly reduce or eliminate income or self-employment taxes.
Some areas of tax law are still unclear as the Tax Court is hearing cases determining issues between independent contractors and employees. These major tax issues generally affect large companies like Uber rather than individuals. As of this writing, most “sharing economy” jobs are treated as small business income and are reportable even if you do not receive a From 1099-MISC.Continue reading