Sneak Tax Hits From Side Hustles
Ready for an oldie but a goodie? Classic tax story incoming…
A new client came to us last week in full panic mode. She'd been making great money from her side hustle all year, but nobody told her about self-employment taxes and the phat bill coming her way. And she's about to owe... let's just say it could probably cover a small wedding.
Here's the thing – side hustles are awesome (I mean, who doesn't want extra cash?), but they come with some sneaky tax implications that most people don't know about until it's too late.
Three quick reality checks:
Making $1,000 doesn't mean you get to keep $1,000
Your main job's tax withholding won't cover your side gig
Quarterly estimated taxes are actually a thing
Don't let your side hustle become a tax headache. Easiest thing right now it to just put away an extra 20% for taxes into a savings account and don't touch it.
And if you have a tax advisor, it might be worth your while to get a tax projection. Think of it like a mini tax return to kind of guesstimate your upcoming tax bill. And then at least you'll know what's coming and can both prepare for it, plus possibly do a few things before the end of the year.
Here's a clip of JT explaining how to save for taxes. I know, I know... and you're right,... it sucks, but hey, you gotta do it.
Here's that clip of the easiest way to start saving for taxes, https://www.instagram.com/p/C8OOHb0MTn4/
