 internal revenue service IRS tax news tax time guide IRS reminds taxpayers to report gig economy income virtual currency transactions foreign source income and assets but first an attempt at a joke I apologize in advance Dr. Fauci in response to allegations delivered by an angry five-year-old girl a five-year-old girl suffering mask wearing related asthma and an inability to describe what a smile is out being involved in gain a function funding Dr. Fauci's initial response was of course his trademark and devastating comeback you don't know what you're talking about I respond sure to take out any five-year-old on the playground why don't you just shut your mouth and put your mandatory mask back on the new kind I mandated I mean the one that includes a muzzle you know to stop COVID Fauci then moved on to telling the angry five-year-old don't mess with me or you may find your next mandatory COVID shot loaded up with some of that new disease we engineered in our other gain of function lab the one located in a small province on the North Pole drawn from a rare ravenous species of penguin it'll shrink your arms down to the point of being useless appendages similar to the comically tiny arms of a tyrannosaurus wreck so you better watch yourself unless you want to never be able to pick your nose again well maybe you'll still be able to pick your nose but if you had a booger that was really deep in there you probably wouldn't be able to reach it with those tiny little penguin arms and don't think I won't do it I already have the public cover-up planned out it's about a starving Indian eskimo who sold some undercooked penguin to an Alaskan carnival cruiser who thought it was chicken a classic case of diseases being distributed from the infamous Alaskan ice markets those dang starving Indian Eskimos calls in all these problems may they be smoten by science incarnate IR 2022-45 March 1st 2022 Washington the Internal Revenue Service reminds taxpayers of the reporting and potential tax obligations from working in the gig economy making virtual currency transactions earning foreign source income or holding certain foreign assets information available on irs.gov irs.gov the irs website and instructions on form at 1040 can help taxpayers in understanding and meeting these reporting and tax requirements so they're listing out all the things that are like kind of their biggest concerns right now at this point in time they haven't quite got the stranglehold over the neck of these kind of things here so they're reminding you about them so we've got the gig economy earning are taxable so the gig economy earnings are taxable possibly more people working in say the gig economy at this point in time especially with the changes that have been taking place over the last couple years here and so that means that you might be going from like a W2 type of income to income that would be possibly reported on like a schedule C for example or you might still have some W2 income and you've been picking up some gig economy work on the side you got to be careful any time you're moving to like a business or schedule C type of system and you're used to W2 kind of system because then you have to actually make your own tax payments and deal with the fact that you have a progressive tax system which is really confusing to try to estimate what the taxes are going to be and you don't know what your taxes are going to be because you've never done the gig economy before and you got to do a social security and Medicare and pay those taxes and whatnot and then you got the fact that it's a gig economy on top of that which means you might not depending on the type of gig economy you have have the same kind of reporting even for businesses things like a 1099 that would give you a reporting of at least a gross income which is what the iris would like to you know lock down on the gig economy they've always had problems with this kind of thing by the way before the gig economy and currencies it was basically anything that was cash-based so like bars and restaurants and hair salons and nail salons and all that kind of stuff was is still stuff that the government or the iris didn't really like because they couldn't lock down or force the person paying the individual person as opposed to a business to issue a 1099 or anything like that so so that these are kind of the areas where the government is skeptical that they're not getting their money about it and these are like the newer ones here so generally income earned from the gig economy is taxable and must be reported to the IRS the gig economy is act is activity where people earn income providing on-demand work services or goods often it's through a digital platform like an app or website now the problem here was for them they'd like to force someone to give a 1099 so that to the IRS so they know who made money and they can track it and they could get a stranglehold on this whole thing but the problem is it's a kind of a big deal or big reporting obligation to do that and you don't really know who to force to do that are you gonna force basically the platform to do that because you're not really working for the platform and you're the platform is just a connection tool or are you gonna force then the payment systems like the pay pals of the world and whatnot to issue the 1099s that's what they're trying to get their hand that's the throat they're trying to get their hands around to ring it until the gig economy dies but they're not quite there yet so you might not get a 1099 and so then you'd still have to report your income anyway so tax payers must report income earned from the gig economy on a tax return even if the income is from part-time temporary or side work not reporting on an information return form like a form 1099 K 1099 miscellaneous W2 or other income statement or paid in any form including cash property goods or virtual currency for more information on the gig economy visit gig economy tax center there's a link to that here understand virtual currency reporting and tax requirements the iris reminds taxpayers that once again there is a request at the top of form 1040 and form 1040 s are asking about virtual currency transactions all taxpayers filing these forms must check the box indicated either yes or no a transaction involving virtual currency includes includes but is not limited to so virtual currency again they're skeptical about the virtual currencies and so that's another area that they're you know they're trying to wrap their giant hands around the throats the receipt of virtual currency as payment for goods or services provided the receipt or transfer of virtual currency for free without providing any consideration that does not qualify as a bona fide gift the receipt of new virtual currency as a result of mining and staking activities the receipt of virtual currency as a result of of hard fork and exchange of virtual currency for property goods or services and exchange trade of virtual currency for another virtual currency a sale of virtual currency and any other dispositions of a financial interest in virtual currency so if an individual disposes of any virtual currency that was held as a capital assets through a sale exchange or transfer they should check yes and use form 8 9 4 9 to figure their capital gain or loss and report it on schedule D form 10 40 if they received any virtual currency as compensation for services or disposed of any virtual currency they held for sale to customers in a trade or business they must report the income as they would report other income of the same type for example W 2 wages on form 10 40 or 10 40 s or line one or inventory or services from schedule C on schedule C on schedule one more information on virtual currencies can be found in the instructions for form 10 40 and the virtual currencies page on irs dot com report foreign source income a US citizen or resident aliens worldwide income is generally subject to US income tax regardless of where they live they're also subject to the same income tax filing requirements that apply to US citizens or resident aliens living in the United States a US citizen or resident alien must report earned income such as interest dividends pensions from sources outside the United States unless exempt by law or a tax treaty they must also report earned income such as wages and tips from sources outside the United States an income tax filing requirement generally applies even if a taxpayer qualifies for tax benefits such as the foreign earned income exclusion or the foreign tax credit there's links to those items here which substantially reduce or eliminate US tax liability these tax benefits are only available if an eligible taxpayer file a US income tax return a taxpayer is allowed an automatic two month extension to June 15th if both their tax home and abode are outside the United States and Puerto Rico even if allowed an extension a taxpayer will have to pay interest on any tax not paid by the regular due date of April 18th 2022 those serving in the military outside the US and Puerto Rico on the regular due date of their tax return also qualified for the extension to June 15th IRS recommends attaching a statement if one of two situations apply more information can be found in the instructions for form 1040 and 1040 SR publication 54 tax guide for US citizens and resident aliens abroad and publication 519 US guide tax for aliens reporting requirement for foreign accounts and assets federal tax 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 part three of schedule B asks about the existence of foreign accounts such as bank and security accounts and usually requires US citizens to report the country in which each account is located in addition certain taxpayers may also have to complete and attach their return form 8938 statement of form financial assets there's a link to that here generally US citizen resident aliens and certain non resident aliens must report specified foreign financial assets on their form if the aggregate value of those assets exceeds certain thresholds see the instructions for this form for details further separate further separate from reporting specified foreign financial assets on their tax return taxpayers with an interest in or signature or other authority over foreign financial accounts whose aggregate value exceeds $10,000 at any time during 2020 must file electronically with the Treasury Department a financial crimes enforcement network FEN CEN form 114 report a foreign bank and financial account FBAR there's a link to that here because of this threshold the IRS encourages taxpayers with foreign assets even relatively small ones to check if this filing requirement applies to them the form is only available through the BSA e-filing system website there's a link to that here the deadline for filing the annual report a foreign bank and financial accounts the FBAR link to that here is same as that for form 1040 the FEN CEN grants filers who missed the original deadline and automatic extension until October 15, 2022 to file the FBAR there's no need to request this extension the news release is part of the and the news release is part of a series called tax time guide a resource to help taxpayers file an accurate return additional help is available in publication 17 your federal income tax so there's links to that stuff here there'll be a link to this in the description