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Liberty Tax Guide Helps Workers Understand Tax Implications of Gig Economy Work

Many are unaware of taxes and deductions for independent contractors

VIRGINIA BEACH, Va., Jan. 30, 2018 (GLOBE NEWSWIRE) -- Liberty Tax, Inc. (NASDAQ:TAX)

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The gig economy in America is thriving with independent contractors signing on daily to work for online platforms, such as Uber and OrderUp. Unfortunately, many gig workers fail to realize their responsibilities as taxpayers – a lack of knowledge that could cost them greatly down the road. In an effort to help gig economy workers understand the tax implications of their work, Liberty Tax has produced a guide of common federal tax questions and answers that many gig workers face.

Gig economy workers need tax help.

  • Gig economy workers are among those the IRS has encouraged to pay close attention to rules regarding estimated tax payments. The number of taxpayers assessed an estimated tax penalty jumped about 40 percent from 7.2 million in 2010 to 10 million in 2015, according to the IRS.
  • Failing to report paymentreceived for work performed as an independent contractor was cited as the No. 1 reason taxpayers receive an IRS notice for incorrect tax calculations, in a survey by the National Association of Enrolled Agents.
  • A survey by the Kogod Tax Policy Center at American University found that “43 percent of respondents who earned money in the gig economy in 2015 were unaware of how much they would owe in taxes and did not set aside money for taxes on that income.”

“Our goal with this guide is to provide important information to those participating in the gig economy,” said Ed Brunot, CEO of Liberty Tax. “We know people want to meet their tax obligations, but if they’re unaware of their responsibilities, that can create problems.”

The guide, “11 Tax Questions Every Gig Worker Should Ask,” covers issues such as federal tax deductions and estimated tax payments. It is casual, easy-to-read, and informative. It answers questions gig workers may have or may not know they should have, including:

  • Do I have to pay taxes if I do not receive tax paperwork from an online platform?

Many gig workers will not receive tax forms because the online platforms that do not pay in cash or check are not required to provide a 1099-K unless a gig worker has 200 transactions or earns $20,000. That doesn’t mean the income isn’t taxable. In reality, self-employed individuals whose net earnings are $400 or more are required to file a federal tax return. 

Liberty Tax will provide the guide free of charge to gig workers, online platforms and others interested in tax issues related to gig work.

Liberty Tax invites gig workers to visit their nearest Liberty Tax office for help in preparing their 2017 income tax returns.

About Liberty Tax, Inc.
Founded in 1997, Liberty Tax, Inc. (NASDAQ:TAX) is the parent company of Liberty Tax Service. In the U.S. and Canada, last year, Liberty Tax prepared over two million individual income tax returns in more than 4,000 offices and online. Liberty Tax's online services are available through eSmart Tax, Liberty Online and DIY Tax, and are all backed by the tax professionals at Liberty Tax locations and its nationwide network of seasonal tax preparers. Liberty Tax also supports local communities with fundraising endeavors and contributes as a national sponsor to many charitable causes. For a more in-depth look, visit Liberty Tax Service and interact with Liberty Tax on Twitter and Facebook

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Source: Liberty Tax, Inc.