The Side Hustle and The IRS
“I’m not a businessman, I’m a business, man. Let handle my business…” -Jay-Z
Growing up I didn’t know anyone who didn’t have a side hustle. When I say hustle I don’t mean anything to do with illegal activities but a side business. My mother works in finance but her side business was real estate and rental income. My father at one point was a partner in McIntosh Security and was a taxi driver. I have a college friend who works in the government but has a side business making and selling jewelry at different festivals. Side businesses are a great way to increase your income, but increasing your income does come at a price.
“More Money, More Problem…”– Notorious B.I.G.
Extra income is great. It gives you more money to pay bills, put away for retirement, go on vacation, and etc. Many people believe that because they’re receiving money from a side business that doesn’t involve their every day occupation they do not have to report the income. This is very untrue. The general rule is that any income regardless of its source must be reported and is subject to taxes. Also just because you receive your profit solely through cash does not mean it is not subject to being reported to the IRS. If the person paying you for your services reports it to the IRS using a 1099 you must report that income or you will be subjected to a tax penalty and interest.
“Like why don’t school teach more mathematics?/Less trigonometry and more about taxes”– “Big Sean
So if you’re person who has a side business you maybe feeling down and can’t believe you may have to give the government more of your hard earned cash. Some people may not even know how to file a their extra income within their tax returns. Well there is good news. Its really not that difficult, if a person uses any tax return software they will guide a person through how to report their side income and also explain the expenses a person can right off that they would not ordinarily be able to write off on a normal tax return.
If you have any questions or would like more information contact Jackie E. McIntosh, Esq. at email@example.com