Engaging in a “side hustle” could be a way to test a business idea before fully committing to it, according to a Bankrate survey indicating that nearly one in three Americans make extra money alongside their full-time jobs. However, managing a side hustle can be challenging, especially concerning tax implications and other potential issues. Below are some strategies to begin working for yourself, even on a part-time basis.
Initially, it is crucial to stay organized. Developing a thorough business plan, even if you are just monetizing a hobby, could prevent complications down the line. Keeping meticulous records of expenses and communications is essential, and using an expense-tracking app might simplify bookkeeping tasks.
Secondly, taxation should be a top priority. Individuals earning more than $400 from self-employment are obligated to file a tax return. The IRS also mandates self-employed individuals to submit estimated taxes on a quarterly basis. Seeking advice from a tax professional can help in determining the most suitable tax filing approach.
Preventing burnout is the third important aspect. Apart from taxes, it is crucial to decide how much time you can commit to your side hustle to avoid exhaustion or feeling overwhelmed. Establishing a customer base is vital, and collecting contact details from clients can provide valuable feedback to guide your next moves.
