Do I have to pay taxes on side hustle income?

Concerns & risks

You started a side hustle driving or selling crafts, and tax season is coming.

Not reporting can lead to penalties later.

Causes & evidence

Self-employment income is generally taxable, and there's no automatic withholding. See tax withholding.

What to do

1. Keep records of income and expenses.
2. Track business mileage.
3. Set aside a portion of each payment for taxes.
4. Look into estimated quarterly payments.

Common mistakes: Common mistakes: thinking small side income doesn't count. Generally income from self-employment is taxable, and you may owe self-employment tax. Keep records of income and business expenses. Consider estimated tax payments so you aren't surprised. The IRS has a Gig Economy Tax Center with guidance. Set aside a percentage of every payment in a separate savings account so the tax money is ready, and keep mileage logs if you drive for work. Free IRS resources and VITA volunteer sites can help if your situation is simple.

Speed Man tip: Business expenses can lower taxable income, so save receipts.

Wrap-up: Side income is generally taxable. No withholding, so set money aside. Track expenses and mileage.