Gig Economy. Tuesday, August 3, 2021

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Gig Economy

Tuesday, August 3, 2021

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Presenter Introduction and Presentation

Stacey Dressler

Supervisory Revenue Agent

IRS, Small Business/Self Employed Division

Important Note: During the presentation you will see the PowerPoint and hear the presenter(s). There will be Poll Questions that MUST be answered when prompted to earn CE credit. Q&A will be at the end of the session as time allows (via the “Ask Question” drop-down menu). There will be a Survey at the end of the Seminar that MUST be answered before you log off to earn CE credit.

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Gig Economy

This presentation will provide an overview of Form 1099-K, Payment Card and Third-Party Network Transactions and how to accurately report amounts on tax returns to improve voluntary tax compliance.

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At the end of this presentation, you will be able to:

• Define the Gig Economy

• Provide an overview of Form 1099-K, Payment Card and Third- Party Transactions

• Define a Payment Settlement Entity

• Describe how to accurately report amounts on tax returns

• Provide filing due dates

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What is the Gig Economy?

A labor market based on flexible, temporary or freelance jobs where an individual earns income by providing on-demand work, services or goods.

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What is Gig Work?

• Rideshare services

• Delivery services

• Renting space and properties

• Selling goods online

• On demand tasks or freelance work

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Poll Question #1

Which of the following is an example of gig work?

a. Delivery driver for a ride sharing service b. Driver for a ride sharing service

c. Grocery delivery for food delivery service d. All of the above

e. None of the above

Use Pop-Up Window To Answer Poll Question

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Poll Question 1 (Answer)

Which of the following is an example of gig work?

d. All of the above

ANSWER: d. All of the above”

Give brief reason for answer as needed

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What is Form 1099-K?

• Form 1099-K, Payment Card and Third-Party Network Transactions is an IRS information return used to report certain payment transactions from payment settlement entities.

• A taxpayer can receive none, one, or multiple Forms 1099- K in a given tax year

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When and Why is a Form 1099-K issued?

• Forms 1099-K are issued in order to increase voluntary tax compliance

• Required to be issued by January 31st

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What Does Form 1099-K Report?

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Poll Question #2

The Gross Amounts reported in box 1a of Form 1099-K does NOT include fees withheld and refunded amounts.

a. True b. False

Use Pop-Up Window To Answer Poll Question

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Poll Question 2 (Answer)

The Gross Amounts reported in box 1a of Form 1099-K does NOT include fees withheld and refunded amounts.

b. False

ANSWER: b. False

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Who issues a Form 1099-K?

• Payment Settlement Entities

– Payment Card Processors

– Third Party Settlement Organizations

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Merchant Acquiring Entities

• Process debt/credit card transactions

• Charge fees for facilitating transactions

• No minimum threshold for reporting

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Third Party Settlement Organizations

• Intermediary between buyer and seller

• Charge fees for facilitating transactions

• $20,000/200 transactions threshold – Beginning in Tax Year 2022

• Minimum threshold is reduced to $600

• 200 transaction threshold eliminated

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Poll Question #3

In which year will the $20,000/200 transaction minimum filing threshold be lowered to $600?

a. 2021 b. 2022 c. 2023 d. 2024 e. 2025

Use Pop-Up Window To Answer Poll Question

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Poll Question 3 (Answer)

In which year will the $20,000/200 transaction minimum filing threshold be lowered to $600?

b. 2022

ANSWER: b. 2022

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How do I report Form 1099-K Income?

• Keep Records

• Information Returns

• Tax Forms and Schedules

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Schedule C

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Schedule F

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Self-Employment Tax

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Poll Question #4

Income from Form 1099-K should be reported on which Schedule?

a. Schedule A b. Schedule C c. Schedule K

d. All of the above e. None of the above

Use Pop-Up Window To Answer Poll Question

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Poll Question 4 (Answer)

Income from Form 1099-K should be reported on which Schedule?

b. Schedule C

ANSWER: b. Schedule C

Give brief reason for answer as needed

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Important Dates to Remember

• Filing Due Date

• Extension to File Due Date

• Estimated Tax Due Dates

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Filing Due Dates

• Form 1040, U.S. Individual Income Tax Return – April 15th

• Extension Due Date – October 15th

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Quarterly Estimated Tax Due Dates

• April 15th

• June 15th

• September 15th

• January 15th

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Can you?

• Define the Gig Economy

• Provide an overview of Form 1099-K, Payment Card and Third-Party Transactions

• Define a Payment Settlement Entity

• Describe how to accurately report amounts on tax returns

• Provide filing due dates

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Hot Topics

Coronavirus Tax Relief COVID-19

Economic Impact Payment Gig Economy

Marijuana Industry Online Account (OLA)

Online Payment Agreements (OPA) Outreach Connection

Payment Options

Small Business News and Resources Tax Professional News and Resources Tax Scams

Unemployment Compensation Virtual Currency

Search

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gig; gig work marijuana view account opa

outreach connection pay

small business news tax pro news

scams

unemployment

bitcoin; virtual currency

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Focus Group Opportunities

• Topic 1: Improving the Taxpayer Experience

• Topic 2: Designing a Business Taxpayers Online Account & Envisioning a Form 1099 Filing Platform

• Topic 3: Changes in Partnership Environment & Where’s Form 944?

• Topic 4: Improving the Offer in Compromise (OIC) Experience & Gig Economy Worker Tax Compliance

• Topic 5: Passport Program & Virtual Currency Tax Compliance

• Topic 6: Interest Abatement Feedback & Civil Penalties and Reasonable Cause Relief

To sign up or for additional information, please e-mail:

SBSE.Research.IRS.NationwideTaxForum.FocusGroups@irs.gov

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Contact Information

Gig Economy Presented by:

Stacey Dressler

Internal Revenue Service, Small Business/Self Employed Division.

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Thank You !

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