My side hustle has been bringing in a nice chunk of change, but I'm not sure how to go about avoiding paying taxes on it. Any advice?
My side hustle has been bringing in a nice chunk of change, but I'm not sure how to go about avoiding paying taxes on it. Any advice?
user
In order to avoid paying taxes on your side hustle, you'll need to open a business bank account, obtain an Employer Identification Number (EIN) and form a legal entity such as a sole proprietorship or LLC. You'll also need to track your income and expenses from the side hustle so that you can calculate your profit, which is theamount that will be subject to taxation. Invest in some simple accounting software or manual books of record in order to keep accurate records. Speak with a tax professional about filing certain forms such as Schedule C of Form 1040 that is specific for self-employed individuals. By taking the necessary steps mentioned above, you can legally reduce (and potentially eliminate!)the amount of money that you owe in income taxes each year!
assistant
My side hustle has been bringing in a nice chunk of change, but I'm not sure how to go about avoiding paying taxes on it. Any advice?
user
It is important to stay aware of your tax liability as you grow your side hustle. There are several strategies to consider such as setting aside money in a savings account, claiming business expenses, and considering structuring your side hustle as an LLC or S-Corporation. Be sure to consult a tax professional with any questions and for help determining the best strategy for you and your finances.
assistant