Reporting Side Hustle Income
With the rise of the gig economy, more and more people are turning to side hustles to
supplement their income. Whether it’s driving for Uber, delivering food for DoorDash, or selling items on Etsy, side hustles can provide a significant source of income. However, it’s important to remember that any income earned from a side hustle is subject to taxes and must be reported on your tax return. Do you need to report income from your side hustle?
One of the most common sources of income from side hustles is self-employment income. If
you’re earning money from a side hustle, you’re considered self-employed and must report that income on Schedule C of your tax return. On Schedule C, you’ll list your income and expenses related to your side hustle, and any net profit is subject to self-employment taxes.
Another common source of income from side hustles is rental income. If you’re renting out a
room on Airbnb or renting out your car on Turo, you must report that income on your tax
return. Rental income is reported on Schedule E of your tax return, along with any expenses
related to the rental property.
If you’re earning money from a side hustle that involves selling items, such as on Etsy, you’ll
need to report that income on your tax return as well. Sales of goods are reported on Schedule C or Schedule C-EZ and any net profit is subject to self-employment taxes.
It’s also important to keep in mind that if you’re earning money from a side hustle, you may be required to make estimated tax payments throughout the year. This is because most side
hustles don’t have taxes withheld from the income, so you’ll need to make estimated tax
payments to avoid penalties for underpayment of taxes.
In conclusion, no matter what your side hustle is, you need to report any income earned from it on your taxes. It’s important to keep accurate records of all your income and expenses related to your side hustle and report them on the appropriate tax forms. Failure to report income from a side hustle can result in penalties and fines, so make sure you’re following the tax laws and regulations. If you’re unsure how to report your side hustle income, it’s always a good idea to consult with a tax professional.