First $1 from a side hustle is taxable. Skip this and your April tax bill will eat your profits.
Google this topic and you will get a hundred answers, half of them wrong. Here is the version that holds up. First $1 from a side hustle is taxable. Skip this and your April tax bill will eat your profits.
Set aside 25–30% of every payment into a separate account. Cover federal, state and self-employment tax.
15.3% on top of income tax in the US. Catches first-timers cold.
Owe more than $1,000? File 1040-ES four times a year or face penalties.
What if I lose money? Net business loss can offset W-2 wages — but document it; the IRS watches hobby losses.
Do I need an LLC? No tax difference for single-member LLCs vs sole prop; LLC is for liability protection, not tax savings.
Whatever number you land on, sanity-check it against a second method or a quick estimate in your head.