Tax Tip #6: Managing the new wave of ‘gig economy’

Tax Tip Tuesday: Gig economy is income earned using digital platforms.

YUMA, Ariz. (KYMA) - The digital revolution continues to shift the culture of so many industries and taxes are no exception.

Digital platforms such as apps, websites, and most notably social media have changed the name of the game when it comes to making easy money.

It's definitely the wave of the future.

The IRS refers to this wave as the gig economy.

People can earn income by providing on-demand work, services or goods.

Think rideshare and delivery services, or brand promotion on Instagram and Twitter.

But where it gets tricky, selling or re-selling items via e-commerce

IRS Special Agent, Brian Watson said, “If you’re creating something and made a profit that’s where your report income. But if you bought something and sell it for a loss at a lower amount you don’t have to report that."

If you do have a business and you’re not sure what's income and what's expenses, it might be your best bet to hire a return preparer to answer those questions for you.

Like any other form of income, you must report money earned from gig economy on a tax return.

This year, the IRS created a gig economy section on its website.