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With approximately 25 percent of Americans having already filed in advance of the deadline of Monday, April 18, the IRS posted a new alert warning about four things to keep in mind when filing their taxes.
According to the IRS, taxpayers should be aware of these potential tax obligations that involve the gig economy, making virtual currency transactions, earning foreign-sourced income, or holding certain foreign assets:
Gig economy earnings are taxable: “Generally, income earned from the gig economy is taxable and must be reported to the IRS," they said. "The gig economy is an activity where people earn income providing on-demand work, services, or goods. Often, it's through a digital platform like an app or website;”
Understand virtual currency reporting and tax requirements: The IRS said it "reminds taxpayers that once again there is a question at the top of Form 1040 and Form 1040-SR asking about virtual currency transactions. All taxpayers filing these forms must check the box indicating either ‘yes’ or ‘no;’”
Report foreign source income: “US citizens and resident aliens must report unearned income, such as interest, dividends, and pensions, from sources outside the United States unless exempt by law or a tax treaty," officials noted. "They must also report earned income, such as wages and tips, from sources outside the United States;”
Reporting required for foreign accounts and assets: “Federal law requires US citizens and resident aliens to report their worldwide income, including income from foreign trusts and foreign bank and other financial accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax return.”
"The (IRS) reminds taxpayers of their reporting and potential tax obligations from working in the gig economy, making virtual currency transactions, earning foreign-sourced income, or holding certain foreign assets,” officials stated. “Information available on IRS.gov and instructions on Form 1040 can help taxpayers in understanding and meeting these reporting and tax requirements.”
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