The Gig Economy – Sharing is Caring
Many people are taking advantage of our Shared Services Community these days – whether putting a house or spare room on Airbnb and VRBO, or driving for Uber or Lyft to earn some extra cash.
There are very important things people engaging in “gig” work should realize so they are not surprised with unintended outcomes:
Insurance – There is no coverage with your normal auto insurance policy if you’re injured in your car while transporting goods or passengers for money. If gig driving, you probably want a commercial auto policy.
The same is true with your homeowner insurance which, in general, does not cover individuals who harm other people or their property while conducting business. A special short-term rental policy would provide additional dwelling and liability coverage.
Taxability – Yes. You are earning money. Yes. It is taxable. On the plus side, however, revenue may be offset with business related deductions. Knowing what to report, when to report it, and what forms to use can be confusing. Lucy advice from the IRS is available. Here is a short but informative video from the IRS tax topics library that address the Sharing Economy.
If you’re sharing – start caring (about your risks and obligations)!