Side Hustle or Legit Job: The IRS is Watching the “Gig” Economy
The Internal Revenue Service (IRS) is keeping a close eye on what is referred to as the “gig” economy. This term refers to a new job market that involves the shift from typical nine to five jobs to short-term, flexible positions. These positions are often self-managed, allowing a great deal of autonomy for those who pursue this type of work.
How do people make money in the “gig” economy? A recent piece in Finder, an online platform that provides information and comparisons about topics ranging from money to travel, dug into this issue. The piece notes that more traditional practices like cleaning or babysitting are common in the gig economy. More modern options are also widely available. These include jobs through Uber or running an online booth on Etsy.
Do these jobs come with tax obligations? Income is income. As such, income gained through the gig economy should be reported to the IRS. This type of income generally falls into the category of “self-employment” income for tax purposes.
What happens if I neglect to pay taxes? A failure to meet one’s tax obligations can come with serious penalties. In serious cases, the IRS may accuse of a taxpayer of tax evasion. Depending on the details of the allegations, the taxpayer could face steep monetary fines and even potential imprisonment.
What should I do if I get contacted by the IRS? Those who are contacted by the IRS are wise to seek legal counsel. The contact, likely in the form of a mailing, could be the beginning of an audit. An experienced IRS tax attorney can represent your interests during an audit, better ensuring a more favorable outcome.
