The Sharing Economy: It's Mine But You Can Have Some

Have you ever caught an Uber or Lyft to a business meeting?  Or, maybe you booked your last vacation through Airbnb?  How about renting an outfit from Rent the Runway for a night out on the town?  If you've ever engaged in any of these activities, welcome to the "sharing economy."  The sharing economy has seen a massive expansion in recent years and continues to grow, as many consumers realize that having access to goods and services is more valuable to them than actually owning those goods and services.  However, as more and more people turn on their cellphones to become taxi cab entrepreneurs or rent their spare bedrooms as amateur innkeepers, many fail to realize the tax implications these activities create.  Many in the sharing economy fail to realize that taxable income is being generated and their assets are being utilized for both personal and business purposes, creating unique tax implications.  Sharing economy taxpayers can also potentially utilize tax advantages of business deductions such as depreciation, which were not previously available to them for simply driving their car. To help guide taxpayers, and tax professionals, through this relatively new and emerging sector of our economy, the IRS recently launched its Sharing Economy Tax Center.  This new resource assists individuals with topics including how to determine whether they are an employee or independent contractor, how much of their property they can be depreciate if it is being utilized in the sharing economy, and the rules for home rentals.  The Sharing Economy Tax Center also offers guidance for companies providing services in the sharing economy, particularly with respect to employment tax issues and filing requirements for these companies. 

As entrepreneurs and property owners continue to seek ways to maximize the return on their time or  underutilized assets and consumers continue to seek the benefits of services or property access without the burdens of property ownership, the sharing economy will likely continue to expand in the future.  Understanding both the benefits and burdens of engaging in these activities can be a complex undertaking, but the IRS's new Sharing Economy Tax Center resource is a great starting place for the most common of issues.  

Contact us if you have questions and visit our Tax Services page to learn more about the services that we offer our clients.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2019 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

The IRS turns its focus to cryptocurrency
The IRS turns its focus to cryptocurrency
#1 Mobile App Garners Concerns Over Data Privacy
Kress Case Addresses S Corporation vs. C Corporation Issues
Can RPAs Help Higher Education?
Not-for-Profit, Tax BY Preet Mann
Mandatory E-Filing of Nonprofit Tax Returns

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office
Pittsburgh

One PPG Place, Suite 1700
Pittsburgh, PA 15222

contactsd@schneiderdowns.com
p:412.261.3644     f:412.261.4876

Map of Columbus Office
Columbus

65 East State Street, Suite 2000
Columbus, OH 43215

contactsd@schneiderdowns.com
p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102