More and more people are taking up a side gig or side hustle as a way to make some extra income. In the past several years, there’s been a huge increase in the number of freelancers and independent contractors, and if you’re one of the many people who has begun working a side gig, remember that you are obligated to pay a self-employment tax as well as contribute to your own retirement.
1. Report your earnings.
If you earned less than $600 from your side gig, you may not have received a 1099 form. However, you are still obligated to report your earnings.
2. Keep track of your expenses.
When it comes to business expenses, make sure you are keeping track of them throughout the year. Purchases that are necessary for your business can then be considered deductible. If you’re not keeping track of your expenses and don’t deduct any of them, you could end up paying too much in taxes.
3. File all necessary paperwork.
In addition to the 1040, remember to also file the Schedule SE and Schedule C.