1099 .is
Get answers to your tax questions in the Sharing Economy. If you are earning income using services like Etsy, eBay, Kickstarter, Airbnb, and TaskRabbit, this is your guide. Learn more @ j.mp/1099is
What about creating a legal partnership or a sole proprietorship?
Two other traditional legal entities are partnerships and sole proprietorships.However, neither of these entities provide protection from unlimited liability and are not especially suited to small businesses utilizing the sharing economy. You can find more information about sole proprietorships and partnerships. ¶ The foregoing is not intended to be, and should not be construed to be, tax advice. This website offers general answers to general questions based on information obtained from www.irs.gov
1099.isOct 18, 2015
I live in one state, but earn income in another state. What state do I attribute my income to?
State taxation can be tricky and requires attention to tax laws that can vary from state to state. For this reason, it is important that…you research the laws applicable to your situation and speak to a professional, if necessary. ¶ A typical scenario occurs when a person lives in one state, State A, but earns income from work done in a second state, State B. In this situation, you will be required to report your income to both State A and B. Although the specifics vary, a common framework will have the taxpayer pay state income taxes in the state where the income was earned, State B, and receive a tax credit on his or her…1099.isOct 18, 2015
I have generated more than nominal income through the sharing economy.
While there are different types of legal entities that an individual can create, the following are a few factors that should be considered…What are the benefits to establishing a formal legal entity? ¶ While there are different types of legal entities that an individual can create, the following are a few factors that should be considered when determining whether creating a separate legal entity is appropriate for an individual. ¶ In the case of individuals seeking protection from unlimited liability and potential tax benefits from businesses that utilize the sharing economy, an LLC (Limited Liability Company) is likely the most…1099.isOct 18, 2015
I have a resource that I utilize for both personal use and resource sharing.
These guidelines will focus on the two most commonly shared resources: automobiles and homes.How do I allocate the separate uses so that I pay the appropriate taxes for each use? ¶ These guidelines will focus on the two most commonly shared resources: automobiles and homes. ¶ Generally, expenses related to a resource that is used for both personal and business purposes can only be deducted for the business purpose of the resource. It is critical that you keep detailed records of the total costs of maintaining your resource.1099.isOct 19, 2015
I am using my car to generate income through a ride-share company.
In general, you may apportion the percentage of the car’s usage that was dedicated to your business as a business expense.Can I claim the costs of maintaining the car (i.e., gas, maintenance, etc.) as a business expense? ¶ In general, you may apportion the percentage of the car’s usage that was dedicated to your business as a business expense. ¶ This means, for example, that the percentage of miles that you drove your car in support of your business should be applied to the total cost of of operating your car. ¶ For instance, in a given year you drive your car 10,000 miles.1099.isOct 20, 2015
I am renting out my entire apartment or house.
Out-of-pocket expenses associated with maintaining your rental property may be deducted from your income for the time it is rented.What portion of the expenses associated with maintaining my home qualify as deductible rental expenses? ¶ Out-of-pocket expenses associated with maintaining your rental property may be deducted from your income for the time it is rented. ¶ Apportioning rental and personal expenses is done by how many days the home was rented as opposed to used for personal use. ¶ However, you may only deduct expenses for the portion of the year that the home was used as a rental property.1099.isOct 20, 2015
What is the definition of a member’s distributive share of an LLC?
Each member’s distributive share is his or her respective interest in the LLC’s profits or losses for a given year (whether or not…distributed to the members) ¶ The members of an LLC, by mutual agreement, can decide the members’ relative interests in the LLC’s income, gain, loss, deduction and credit for a particular year. Each member’s interest is represented by the member’s “distributive share”. This is the amount that is allocated to each member each year for tax purposes and that is listed on the Schedule K-1 issued to each member with respect to its interest in the LLC.1099.isOct 19, 2015
I own my LLC along with one (or more) other members.
Multi-owner LLCs (like single-owner LLCs) are taxed only at the individual level.How should we apportion the amount of profit (or losses) for the purpose of reporting taxes? ¶ Multi-owner LLCs (like single-owner LLCs) are taxed only at the individual level. ¶ This means that each individual owner will only have to pay taxes on the profit or loss of the business in their personal income tax statements. ¶ However, one difference with a multi-owner LLC is that each member of the LLC pays taxes on his or her share of the profits (or losses of the LLC).1099.isOct 19, 2015
I am the sole owner of my LLC. How do I report my income and losses?
As the sole owner of an LLC, you will report all of the profits (or loss) from your LLC on Schedule C and file it with your 1040 Tax Return…. ¶ [IRS]: Single Member Limited Liability Companies ¶ [IRS]: Form 1040 Schedule C ¶ The foregoing is not intended to be, and should not be construed to be, tax advice. This website offers general answers to general questions based on information obtained from www.irs.gov and other publicly available information. Collaborative Fund cannot be held responsible for the results of any position taken on a tax return by any user of this site.1099.isOct 19, 2015
I plan to use my recent crowdfunding capital as a first step in building a company and am…
If you plan to use the crowdfunding you received as a stepping stone towards future funding, it may be best to incorporate as a C…interested in pursuing equity funding in the future. What type of company should I create? ¶ If you plan to use the crowdfunding you received as a stepping stone towards future funding, it may be best to incorporate as a C-Corporation. ¶ A C-Corporation is a traditional corporate structure that has no limits on the number of shareholders it can have. This means that if you plan to raise venture funding down the road, or have hopes of building a company that will offer an IPO or seek to be…1099.isOct 18, 2015
How will my LLC be taxed?
How your LLC will be taxed is up to you.By default, an LLC is taxed as a partnership if it has two or more members, or as an entity disregarded from its owner (like a sole proprietorship) if it has a single member. ¶ If the LLC’s owners file the IRS Form 8832 , they may elect to have the LLC taxed as a corporation for U.S. federal (and state) income tax purposes. ¶ Thus, one of the primary advantages for a small business of an LLC over a C-corporation is that the member(s) can choose to have the income generated through the LLC…1099.isOct 18, 2015
I have decided to form an LLC for my project. What do I need to do?
The first step in establishing an LLC is to file the Articles of Organization with the state in which you plan to do business.Each state will have its own separate requirements of what needs to be included in the Articles of Organization and what documentation must accompany it. ¶ For example, in New York, there is a publication requirement. This means that the members of the LLC must publish its initial Articles of Organization in two recognized newspapers for six consecutive weeks. ¶ Additionally, although it is not necessarily required, the members of an LLC are encouraged to adopt a written Operating Agreement…1099.isOct 18, 2015