Summer is the perfect time to pick up a side hustle, as many do. Teachers on break, students home from college, or anyone looking to boost their income often take on part-time gigs like tutoring, dog walking, freelancing, or selling goods online. While that extra income can be a real benefit, it comes with one thing you can’t ignore: taxes.
If you earn $400 or more from self-employment, you may owe self-employment tax and income tax. Even if you’re paid in cash or through an app like Venmo or PayPal, it still counts as taxable income.
Good record keeping will help you stay organized and save money when tax time rolls around. Be sure to track:
Income records: What you’re paid and by whom. Save invoices, screenshots of payment apps, or transaction reports.
Expenses: Save receipts for supplies, phone or internet usage, and any tools directly related to your side work.
Mileage: If you’re driving for work (e.g., ride-share, deliveries, client visits), log your miles with a dedicated app or notebook.
Consider making estimated quarterly payments if you expect to owe more than $1,000 in taxes for the year.
Taking on a side hustle is a great way to supplement your income, but don’t let taxes catch you off guard. Partnering with a tax professional early can make a big difference and help you avoid common pitfalls. They can help you develop simple systems for tracking income and expenses, estimate what you might owe, and identify deductions you may not know about.
More importantly, building a relationship with a trusted advisor like David A. Santini, CPA, means you’ll have someone in your corner as your side hustle grows or your financial picture evolves. With a year-round resource to guide you, not just at tax time, you’ll be better equipped to make smart decisions, stay organized, and avoid costly surprises.