Side hustle taxes

Side hustle income is taxable in most countries. Here's how it works in the U.S., from IRS sources.

1. Income tax and self-employment tax

If net earnings from self-employment are $400 or more, you generally file and pay self-employment tax of 15.3% (12.4% Social Security + 2.9% Medicare) on 92.35% of net earnings, plus income tax (IRS). Estimate yours with the SE tax estimator.

2. Quarterly estimated payments

If you expect to owe $1,000 or more when you file, the IRS generally expects quarterly estimated payments (IRS: estimated taxes). With a W-2 job you can raise your withholding instead.

3. Deduct real business expenses

Supplies, software, the business share of phone and internet, mileage: ordinary and necessary expenses reduce taxable profit. Keep receipts.

4. Platform forms

Payment apps and marketplaces may send Form 1099-K or 1099-NEC. All income is taxable whether or not you get a form (IRS gig economy tax center).

A rough habit

Set aside part of every payment. Many people use 25–30%, but that's a habit, not a calculation; your real rate depends on your total income.

General information, not tax advice. Tax reviewer (CPA/EA): to be added.

UK: UK side hustles · Canada: Canada