IRS Reminds America That Even Uber Income is Taxed
Driving a car for Uber and Lyft can be stressful, especially since there are so many services and laws coming out of the woodwork to regulate the very legitimate challenge to existing taxi services. Being able to choose hours to work based on your schedule, however, is very attractive to many people looking to make extra money away from their other jobs. How exactly does that money get taxed?
Unfortunately, Uber gets away with many of its business practices because drivers are not employees of the company, but contractors. Uber deposits money in a driver’s account, but there no taxes withheld for Social Security, Medicare, or income taxes. The whole situation can be very confusing, and the Internal Revenue Service in the United States has noticed. That’s why they have set up a new web page just for people who make money through the “sharing economy”.
The Sharing Economy Tax Center has tax forms that apply not only to Uber and Lyft drivers, but also to anyone that earns money through sites like Airbnb or freelancers on their own as a contractor. While it looks like a bummer that the IRS is looking out for people not paying enough in taxes, it has set up several resources to help these self-employed individuals report business deductions that can lower a tax bill in April.
The same people who go to this site to learn how to file their taxes should also research self-employment and income taxes for their state and city as well. The only things certain in life are death and taxes, and no unconventional income sources can save you from the taxman.
News Source: Lifehacker/Two Cents