Client With a Side Gig? Maybe Have a Talk

By:
Chris Gaetano
Published Date:
Jan 10, 2018
STORY NO.6

With more and more people taking on side gigs to make ends meeting, CPAs might want to have a talk with their clients, as recent research has found that few people actually report this income to the government, according to Accounting Today. A CNN report from July found that, overall, more than 44 million people in the U.S. have a side gig of some sort. Meanwhile, a recent NY Post found that half of Millennials, and 25 percent of Boomers, have one. Income from these gigs, though, are rarely reported, which can lead to big tax headaches down the road. This is especially the case when the side gig isn't, like, occasionally picking up an Uber passenger or babysitting for harried parents: the biggest offenders seem to be those making between $150,000 to $300,000, as nearly a third of those in this income range don't report side income. 

Sometimes this comes from actual intent, but can also be the product of ignorance and sloppiness. People who've never been self-employed before, for example, may not fully understand the tax implications, and may not receive the appropriate 1099 to remind them. Part-time W-2 work, meanwhile, often under-withhold, much to the detriment of those who eventually have to make up the difference. 

This means that, if a client is making money on the side, CPAs might want to schedule a talk to make sure everything is being done properly. 

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