3 Tax Misconceptions That Could Come Back to Haunt You
The tax code has always been complicated, and the 2018 overhaul brought about numerous changes that have made things even more complex. As such, there's a lot of misinformation floating around about taxes, but if you allow yourself to believe the following myths, you'll be setting yourself up for disaster.
An estimated 45 million Americans have a side hustle these days, and if you're one of them, you're probably enjoying that extra income on top of your regular paycheck. But just as you're required to have taxes taken out of your salary, so too are you liable for taxes on the income you earn from that second gig.
Now many people who have a side hustle are employed in an independent contractor capacity, so if that's the case for you, it means you won't have taxes taken out of your earnings as you go. Rather, you'll need to keep track of your income, report it to the IRS when you file your return, and pay estimated quarterly taxes on it along the way. Therefore, if you typically bring home $500 a month from a second gig, don't assume that entire $500 is yours to spend. Rather, set some of that money aside for taxes, and then use that cash as you see fit.
Source Fool.com
