If you’re filing taxes for your side hustle, understanding your tax obligations is crucial. Whether you’re freelancing, driving for a rideshare service, or selling products online, the IRS considers your side income taxable. Here’s what you need to know to stay compliant and reduce your tax burden.
1. Report All Income
All income from your side hustle must be reported, even if you didn’t receive a 1099 form. The IRS tracks transactions from platforms like PayPal, Venmo, and Stripe, so ensure you report your earnings accurately.
2. Understand Your Tax Responsibilities
Unlike W-2 employees, side hustlers don’t have taxes automatically withheld. If you expect to owe more than $1,000 in taxes, you’ll need to make quarterly estimated tax payments to avoid penalties.
3. Take Advantage of Tax Deductions
Reduce your taxable income by claiming eligible deductions, including:
- Home Office Deduction – If you work from home, a portion of rent or mortgage interest may be deductible.
- Mileage and Travel Expenses – If your business requires travel, track your miles and expenses for potential deductions.
- Supplies and Equipment – Business-related purchases like laptops, software, and office supplies can be deducted.
4. Keep Accurate Records
Maintain receipts and financial records throughout the year to support your deductions and avoid IRS audits.
5. Work with a Tax Expert
Filing taxes for your side hustle doesn’t have to be stressful. A tax professional can help you maximize deductions, estimate payments correctly, and file with confidence.
If you need help filing taxes for your side hustle, GO Accounting & Tax is here to guide you. Contact us today for expert tax advice!
