You May Not Have Paid the Right Taxes for Airbnb
The gig economy seems a lot less cuddly come tax season, especially for the underemployed who provide raw material and have come to depend on startups like Airbnb for income.
It's not just the accountants who are seeing a shift: The Freelancers Union, a nationwide network of more than 250,000 independent workers, was suddenly overwhelmed by inquiries about how to account for sharing-economy income on tax returns.
"It went from basically zero to a pretty significant amount," said union spokesman Dan Lavoie. "Really, this was not on the radar screen not that long ago for any of our members. Now suddenly it is, and it's a pretty significant income stream for a lot of freelancers."
But despite the fact that freelancers are aggressively compliant tax fliers, they're not sure if they properly accounted for income from Airbnb:
"On the one hand they need the extra income; on the other hand it's not easy in this city to be in compliance," said Jonathan Medows, a Manhattan CPA who also specializes in freelancers. "They're kind of caught between a rock and a hard place. It's so bloody expensive to be here, it's created this cottage industry in New York."
The CPA said it's the company that should be scrambling for a solution, since the site makes money no matter what users end up owing or how hard it is for them to pay.
The same sublet situation on Craigslist might go unnoticed by the IRS, but a $10 billion valuation must look like a bullseye. In anticipation of that, Airbnb finally started trying to comply with regulators six years after it launched. The company told Vice they don't have the answers either:
But Airbnb insists it's not so simple: Exactly what hosts are responsible to pay can vary dramatically from city to city and state to state. Bring deductions into the picture and the variations expand exponentially.
Part of the onus is on individual cities and states to clarify the tax burden, but tucking it away in the fine print doesn't help.
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