Tax Considerations for Self-employed or Side-Hustle Income
Since the start of the pandemic, many have found new employment outside of the traditional 9-5 workday.
If you earned income from a freelance gig, you’ll need to report that on your taxes. Even if you didn’t get a W-2 from your side hustle employer, the government should know how much money you took home last year through every revenue stream you have, including cash transactions. And, starting in 2022, income earned over $600 through digital payment apps like Paypal and Venmo will be reported to the IRS for next year’s taxes.
Income from your freelance gig can both help and hurt your taxes. You might spend more time filing your taxes and you may even end up paying self-employment tax, but there are some credits and deductions you could qualify for. Self-employed people can deduct some of their home, equipment, or vehicle expenses if they’re used for business. You might also be able to claim educational expenses and health insurance costs if your day job doesn’t cover those for you.