From The Business Journals, Kent Hoover reports on Congressional hearings conducted by the House Small Business Committee on the sharing economy. Kent writes:
The focus of the committee’s hearing was on how the tax code doesn’t work well for people who drive for Uber or work for other on-demand “sharing economy” businesses. As independent contractors, these workers essentially are self-employed, facing the same tax requirements as self-employed people in traditional fields.
But many of the 2.5 million people who earn income through on-demand platforms aren’t aware of their tax obligations, said Caroline Bruckner, managing director of the Kogood Tax Policy Center at American University. In a survey she conducted for the National Association for the Self-Employed, more than 43 percent of people who earned income in the gig economy didn’t know how much they would owe in taxes on this money and didn’t set aside money to pay it.
Nearly half also didn’t know about tax deductions, expenses of credits they could claim to reduce the taxes they would owe on this income.
In most cases, they did not receive a Form 1099 from their on-demand platform, which likely means the Internal Revenue Services didn’t receive one either. This lack of information reporting increases the burden of complying with tax laws, Bruckner said.
Read the full story at Labor laws, tax policy need to be adapted to gig economy, House Small Business Committee is told – The Business Journals