Side Hustles and taxes: What you need to know

Having a side hustle to many households represents an important extra income that helps reach the budgeting goals and funds administration. Because of its relevance it’s vital to know under which conditions these income is taxable an how to, those are the topics we will look through on these month blog

Earning any amount from $400 and up from a side hustle makes you eligible for self-employment taxes.

• Save percentage of your income for taxes

Every sale or project you have as a side hustle is an income, so you may want to save a little percentage of every transaction on a bank account for the income taxes and the self-employment taxes 

• Organization is key

Keeping an organized bookkeeping as a sole entrepreneur is important because you will be responsible for calculating taxes and having an organized archive of expenses and income from the side hustle will save you a lot of stress.

• Estimated taxes on side hustles?

It depends on the amount of income received, if it is expected to be roughly around $1,000 you may divide the payments quarterly or compensate the tax withholding at the regular job with a Form W-4.

• • Forms for Side Hustles
    • 1099-NEC: Fill this if you receive a payment of $600 or more
    • 1099-K: Used for digital payment platforms such as Venmo and Paypal
    • C Form: It’s like a suminary of all the income received by the side hustle 

• Tax deductions