How to Do Your Taxes if You Have a Side Gig
Millions of Americans have come to appreciate the value of having a side hustle that brings in a little extra income each year. That bit of extra money can make all the difference between barely getting by and having enough income to pay down debt, save money for emergencies, and generally get yourself in a better financial position. But there's one drawback to a successful side gig: It adds a new level of complexity to your income taxes.
Whatever your primary source of income may be, if you have a side gig, you likely qualify as self-employed in the eyes of the IRS. That means you'll have to jump through a few extra hoops to report your side income and correctly calculate, and pay, the resulting taxes.
Anyone with self-employed income is required to fill out Schedule C when preparing a federal tax return. If you have $5,000 or less of business-related expenses to report, you can use the Schedule C-EZ instead. A side hustle resulting in a loss for the year requires you to use Schedule C rather than Schedule C-EZ.
Source: Fool.com
