Tuesday, April 23, 2019

Six Things Taxpayers Should Know About The Sharing Economy And Their IRS Taxes

From renting spare rooms and vacation homes to car rides or using a bike…name a service and it’s probably available through the sharing economy. 

Taxpayers who participate in the sharing economy can find helpful resources in the IRS Sharing Economy Tax Center on IRS.gov. 


Here are six things taxpayers should know about how the sharing economy might affect their taxes:

1. The activity is taxable.
Sharing economy activity is generally taxable. It is taxable even when:
  • The activity is only part time
  • The activity is something the taxpayer does on the side
  • Payments are in cash
  • The taxpayer receives an information return – like a Form 1099 or Form W2
2. Some expenses are deductible.
Taxpayers who participate in the sharing economy may be able to deduct certain expenses. For example, a taxpayer who uses their car for business may qualify to claim the standard mileage rate, which is 58 cents per mile for 2019.

3. There are special rules for rentals.
If a taxpayer rents out their home or apartment, but also lives in it during the year, special rules generally apply to their taxes. Taxpayers can use the Interactive Tax Assistant tool, Is My Residential Rental Income Taxable and/or Are My Expenses Deductible? to determine if their residential rental income is taxable.

4. Participants may need to make estimated tax payments.
The U.S. tax system is pay-as-you-go. This means that taxpayers involved in the sharing economy often need to make estimated tax payments during the year. These payments are due on April 15, June 15, Sept. 15 and Jan. 15. Taxpayers use Form 1040-ES to figure these payments.

5. There are different ways to pay.
The fastest and easiest way to make estimated tax payments is through IRS Direct Pay. Alternatively, taxpayers can use the Electronic Federal Tax Payment System.

6. Taxpayers should check their withholding.
Taxpayers involved in the sharing economy who are employees at another job can often avoid making estimated tax payments by having more tax withheld from their paychecks. These taxpayers can use the Withholding Calculator on IRS.gov to determine how much tax their employer should withhold. After determining the amount of their withholding, the taxpayer will file Form W-4 with their employer to request the additional withholding.

IRS YouTube Videos:
Your Taxes in the Sharing Economy – English | ASL

For help with your legal needs contact a business, tax, and health care law attorney at the offices of AttorneyBritt.

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Physicians, Hospitals, Clinics, And Other Health Care Providers Beware HHS Interpretation Of HIPAA Compliance Rules

As MD Anderson has learned the hard way over the past couple years HHS' interpretation of Mandatory versus Addressable HIPAA compliance rules and regulations can vary from the business practices of many Physicians, Hospitals, and other Health Care Organizations.

HIPAA provides many compliance rules that health care organizations must follow.  Those must follow rules are commonly referred to as "Mandatory".  Mandatory rules and requirements must be implemented to avoid HIPAA compliance problems.  There are however another set of rules and requirements that are not listed as Mandatory.  Instead these rules and requirements are listed as "Addressable".  Addressable rules have been treated by many Health Care Organizations as optional or merely suggestions by the government.

HHS however has made it clear in pursuing large fines against MD Anderson that the Addressable rules and requirements are more mandatory than optional.

HHS has ruled in the MD Anderson case that Addressable rules and requirements, specifically in the MD Anderson case the use of encryption techniques to secure electronic protected health care information, are MANDATORY unless the health care organization can demonstrate reasonable reasons why any particular Addressable rule and requirement does not need to be followed.

In the MD Anderson case a laptop and a few thumb drives were lost or stolen.  As a result the unencrypted electronic protected health information was disclosed to unauthorized persons.  MD Anderson contended that since encryption was an Addressable rule and requirement it was optional and therefore MD Anderson was not at fault for the unauthorized disclosures.

HHS says MD Anderson is wrong.  HHS says Addressable rules and requirements such as encrypting electronic protected health information is MANDATORY, and NOT optional, unless the health care organization can demonstrate a reasonable basis for why the Addressable rule and requirement in question does not need to be followed.

HHS ruled MD Anderson had not made any showing of a reasonable basis for not following the Addressable encryption of data rule, and therefore levied substantial penalties on MD Anderson.

MD Anderson is appealing to the courts, but their legal fight seems to be an uphill battle.

Best practice for any physician or health care organization is to treat Addressable rules and requirements, such as encryption of data, as Mandatory, unless they have some very strong and reasonable reasons why any specific Addressable rule and requirement does not need to be followed.

For help with your legal needs contact a business, tax, and health care law attorney at the offices of AttorneyBritt.

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