Drove for Uber? Rented out your home? Here are some tax tips

NEW YORK - (AP) -- If you're driving for Uber or renting out a room through Airbnb to make some extra cash, don't forget -- you likely need to pay taxes on what you earned, even if it's a part-time gig.

Unlike full-time jobs, where taxes are automatically withheld from every paycheck, it's usually up to freelance workers to keep records and put aside money to eventually pay the IRS. And since the IRS considers on-demand workers to be self-employed, it also helps to keep track of expenses that can help reduce your tax bill.

Here are some tax tips for those working as part of the on-demand economy:

NO FORMS DOESN'T MEAN NO TAXES

You may not receive a form at the end of the year listing everything you earned. That doesn't mean you can skip paying taxes. You may owe the government on what you earned and could get in trouble if you don't pay.

Those earning money through on-demand apps such as Uber or Lyft need to report the income on a Schedule C form, says Fred Slater, a certified public accountant and principal at MS 1040 LLC in New York. And if you used Airbnb or other home-renting sites to bring in income, use Schedule E.

Any money you made is easily traceable since transactions take place online. "You'd be nuts not to report it," Slater says.

PAY TAXES EVERY QUARTER

Typically, you'll need to pay taxes every three months throughout the year. Making those payments can prevent you from having to send one big sum to the IRS at the end of the year. Known as estimated tax payments, they're due on April 15, June 15, Sept. 15 and Jan. 15. The IRS website has more information on estimated taxes and how to figure out how much you need to pay. It's at https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes.

If you have a separate full-time job that already deducts taxes out of your paycheck, the IRS says you can ask your employer to increase your tax withholdings to also cover on-demand gigs. You would need to give your employer a W-4 form and indicate how much more to withhold, according to the IRS.

KEEP TRACK OF EXPENSES

Much of what you spend for on-demand work can be used to reduce your tax bill. If you're driving your car for Uber or Lyft, for example, car washes, fuel costs and auto repairs can be deductible, says Frederick Towles, an accountant at The Towles Group Inc. in Uniondale, New York. But you'll need to keep records of what you spend throughout the year. And also keep track of the miles you drive getting to a customer and during the ride, says Towles. Mileage tax deductions for businesses were worth 54 cents per mile driven in 2016, according to the IRS.

RENTING YOUR HOME

You don't need to pay taxes if you rented out your house for less than two weeks. But you will owe them if you rented it out for 15 days or more throughout the year. You may be able to deduct some expenses to lower your tax bill, such as mortgage interest, repairs or utilities used while it was rented out, so make sure keep track of those payments.

MORE HELP ONLINE

Last year, the IRS posted a tax guide for on-demand workers with links to forms, calculators and videos. Find it at: https://www.irs.gov/businesses/small-businesses-self-employed/sharing-economy-tax-center .

_____

Contact Joseph Pisani at http://twitter.com/josephpisani

advertisement | advertise on News 12

Trending Video

A study says 88 percent of walking trips 1 Word on the Street: Walking with GPS
VIDEO: Suspected gang members arrested in the Bronx 2 VIDEO: Suspected gang members arrested in the Bronx
3 Bronx Sportscast, April 17
4 Bronx Sportscast, April 24
5 Word on the Street: Dating apps and self-esteem

advertisement | advertise on News 12

Related Travel Stories

#n12travel headed to vermont Your Travel Photos

Whether you took a one-day getaway or a two-week tour of Europe, News 12 wants

Things to know before hitting the road with your pet

Traveling with pets is just like traveling with children in that it requires a little

A tour helicopter lifts off inside the Grand The great American vacation destination

With airfares to Europe on the rise, it looks as if Americans are planning to

Leaves begin to change color along the Swift Free things to do in New Hampshire

For a small state, New Hampshire offers a variety of free experiences in the fall,

Sorry to interrupt...

Your first 5 are free

Access to News12 is free for Optimum, Comcast®, Time Warner® and Service Electric℠ video customers.

Please enjoy 5 complimentary views to articles, photos, and videos during the next 30 days.

LOGIN SUBSCRIBE