#peersprotips

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Tax Answers for the Sharing Economy

Through the Peers Pro-Tips series, we aim to address issues raised by sharing economy providers - the rideshare drivers, task do-ers, homeshare hosts, and others - who earn a living or supplement their income with peer-to-peer solutions. Today, we’re presenting a special edition of ProTips - as part of a live chat with the Freelancers Union! Read the live chat here.  

As the winter’s (hopefully) final storms are rolling across the country, and March Madness kicks up, we can start to see the signs of the upcoming season: yep, it’s tax season!

If you earned money through a sharing economy platform in 2013, right about now you’re probably trying to figure out how to treat that income as you prepare your taxes (or, ahem, as you think about eventually preparing your taxes at the last possible moment).

Let’s start with a little quiz:

True or False: Even if you earned less than $600 a year doing work with any given sharing economy platform, you have to pay taxes on that income.

True or False: If you drive your car as a provider for a rideshare platform - in addition to driving it for personal use - you can only claim as business expenses those expenses related to your business use of the car (not all expenses).

True or False: Earning trade or barter dollars through a barter exchange is considered taxable income, just as if you sold a product/service for cash.

If you answered “False” to any of these questions, you may want to take some time to find out more about the tax issues specific to providers in the sharing economy. The sharing platforms that enable enable this new kind of work also create a new kind of income that doesn’t fit neatly into your IRS forms. So, if you have questions, you will find that you are not alone.

That’s why Peers teamed up with the Freelancers Union. Yesterday, we hosted a special pro-tips edition of the March Share Session on Taxes in the Sharing Economy. We hosted a live chat with tax guru Jonathan Medows to answer some really great questions:  

What kinds of deductions can we take if we share tools and equipment, and how much can we claim if we share our car?

What is an appropriate way to measure the expense of renting a room?

Am I required to claim income that is designated as a donation?

… and many, many more. Read the whole chat here!

And if you’ve still got questions, there are even more resources available for sharers at tax time. Our friends at Collaborative Fund last year launched an incredible resource that crowd-sources answers to your most pressing tax-related questions: 1099.is. On the site, you’ll find questions posed by providers like you along with answers that have been prepared and vetted by tax professionals and lawyers. While they are quick to remind visitors that the advice provided is general in nature and that individuals should continue to seek guidance on their specific obligations from a tax professional, the site has a wealth of initial information to help you understand what to expect as you prepare to pay Uncle Sam this year.

We want to hear how tax season is going for you. Are you running into problems? Or is it easier than you thought? Let us know on Twitter or leave a comment on our Facebook page!

This information is proved to Peers’ members for information purposes only. We’re neither lawyers nor CPAs, so if you have any questions about your own situation, consult a professional.

Big thanks to the Freelancers Union for this collaboration. It’s an AMAZING organization which promotes the interests of independent workers through advocacy, education, and services. Through their work, Freelancers Union connects freelancers to group-rate benefits, resources, community, and political action to improve their lives – and their bottom lines. Check 'em out! 

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Peers Pro-Tips: The Affordable Care Act

Many Peers members depend on the sharing economy for their livelihood. Rideshare drivers, task do-ers, homeshare hosts, and others are earning a living, or supplementing their income, through the sharing economy -- not just paying the bills, but working flexible hours, meeting new people, and spending more time with their families.

We’ve pulled together some information to help shed some light on how the law -- especially some of the provisions that are just going into effect -- might impact our members in the United States. (Big thanks to our friends at Freelancers’ Union who assembled similar material.)

What is the Affordable Care Act (ACA)?

The ACA is comprehensive health reform legislation that was signed into law on March 23, 2010. While much of the law has already gone into effect, a couple of the most talked-about provisions are just now becoming reality. Specifically, on October 1, 2013, the federal government and state governments launched new health insurance exchanges, or marketplaces. Using these marketplaces, people who don’t have coverage through their employer, Medicare, or Medicaid, can compare available options and enroll in the plan of their choice. Under the law, everyone is required to have health insurance by March 31, 2014.

How much is it going to cost me?

The short answer: It depends.

The long answer: There are a number of factors that impact an individual’s cost of coverage, including age, state of residence, income level and desired coverage amount. In addition, there are new tax credits and subsidies that may help defray the cost. The Kaiser Family foundation has a handy calculator to help you figure out what you might expect to pay for insurance through the exchanges.

A few basic rules of thumb:

If you’re under 26, you’re eligible for coverage under your parents’ plan.

If you’re under 30 and you earn less than $35,000, you can get less expensive “catastrophic” insurance that provides limited coverage (only in case of a major accident).

If you’re earning $19,539-$78,120 per year, you will most likely qualify for partially or completely subsidized coverage under expanded Medicaid, subsidies or tax credits.

If you’re earning more than $78,120, you will likely be expected to cover the cost of your own insurance.

What do I need to do?

Get covered! If you already have health insurance, you’re good to go. If not, visit healthcare.gov to review your options and enroll by March 31, 2014. If you sign up before February 15, coverage can begin as soon as March 1, 2014.

If you don’t enroll, you should be prepared to pay a penalty: this year, it would cost you either 1% of your yearly household income or $95 (whichever is higher); by 2016, the penalty increases to 2.5% of your yearly household income or $695 (again, whichever is higher).

This information is proved to Peers' members for information purposes only. We're neither lawyers nor CPA, so if you have any questions about your own situation, consult a professional.

Sources: Freelancers Union, “What ACA Means For You”; Kaiser Family Foundation, ACA Summary; Department of Health and Human Services, “About the Law”

Creative commons photo courtesy jfcherry (thank you jfcherry!). Peers added text to the photo.