Every month I post my extra income updates. These are my most popular websites on my website, which is great because I do love talking about it. The popularity of these posts also gives me motivation to work on my side businesses even more, which is another big positive.
I seem to be doing very well, and one question that I receive a lot is how I am handling taxes and my side jobs. Don’t worry guys, I think about taxes pretty much every single day. It’s hard to not think about taxes!
Taxes and the self-employed
Taxes can eat up a lot of a self-employed business person’s income. Taxes also need to be done correctly and there are many different tax laws that need to be abided by. If you think you might get a tax audit, click here.
No one wants to get audited, but you never know when it may happen. The idea of a tax audit scares me a lot, and that is why I want to have my business taxes as good as possible for the IRS. I do not want to miscalculate or misrepresent anything.
For me, I definitely plan on getting a tax accountant for this tax year. Before, my side hustle income was never that large and I was always able to do taxes myself. However, my side hustle income has grown very large and quickly this year, and taxes are much more complicated. Without professional help, I don’t know where I would be when it comes to taxes and my side business!
Different Side Businesses
I have many different side hustles. A lot of them relate to blogging in some form.
With staff writing, I am writing on someone’s website. With blogging, I am of course blogging on my website. With managing blogs, that is of course directly related to blog work as well.
However, the way I receive income for my various side hustles can vary widely. I may only receive a percentage and then still have to pay someone else. I may have also received the full payment. I may also have had expenses tied to one of my side hustles (such as fees). All of these need to be thought about when it comes to taxes and my side jobs.
Have you thought about taxes and your side business? I hope so! 🙂
Alexandra @ Real Simple Finances says
Michelle, do you set aside a percentage of your earnings in anticipation of your taxes? If so, how do you come up with that number?
I set aside 35% for taxes. Taxes are usually around this point for self-employed, but it depends on each individual person. I would research this as I’m not a tax professional 🙂