The Peck Group LC
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Comprehensive Tax Law Representation Since 1995
We handle every aspect of tax law: preparing tax returns, representing clients during audits, resolving IRS and state tax controversies, and creating tax planning strategies for the future.

Old tax problems for people working in new industries

On Behalf of | Jun 7, 2016 | Corporate & Business Tax |

Workplaces across Georgia can look very different today than they did a decade ago. These days, many people are working from home, starting their own businesses and branching out into new career fields thanks to an improved economy and quickly advancing technologies. People are making a living doing things they love.

While this can certainly be a good thing for people like bloggers, YouTube personalities and app developers, there are some traditional obstacles that they can face, just like any other worker in any other profession. For instance, if you are actively and continuously involved in a project that makes you money, it’s not just your hobby in the eyes of the law; it’s a business.

If you do something like blog, make videos online, create mini games or something similar, chances are you do it because it’s fun and you like it. You might even have a completely different job and come home every day relieved to work on your passion project, seeing it as little more than a diversion.

However, according to the federal government, you could actually be self-employed and subject to self-employment tax. 

There are specific guidelines on what distinguishes a hobby from a trade or business, which you can read about in more detail in this Forbes article. But essentially, if you make money doing something regularly and continuously, you will need to pay taxes.

In this day and age, the line between leisure activity and legitimate business isn’t always clearly defined, even to you, your friends and your family. However, when there are taxes that should be paid, it gets very clear to the IRS, who will aggressively pursue any and all taxes you may owe.

Because this can come as a great surprise to you and you may have no idea what to do, it should be a great relief to know that an attorney can be a critical resource and ally in these situations. Consulting an attorney with questions about self-employment tax and communications with the IRS can help you protect yourself, your project and your financial well-being.

We insist that your taxpayer rights are protected and your options are known.

Our services are confidential and are protected under the attorney-client privilege as allowed by law.