Earning cash from a side gig
“Feel like every day you’re hustling, hustling? Yeah, you and 44 million other people,” said Anna Bahney in CNN.com. That’s how many Americans say they’re working a side job in addition to their regular employment, according to a new study from Bankrate. A side hustle can be just about anything, like selling handmade items online, picking up extra freelance work after hours, or driving passengers or running errands through an online app. It’s not chump change either. Of the people who make money from their side job every month, 36 percent are making $500 or more. “That extra dough is becoming a key part of making ends meet.” More than half of the people with side gigs put the money toward basic expenses, “rather than using it as bonus money for saving, investing, or extras.”
“Resist the urge to spend that extra hard-earned cash,” said Abigail Summerville in CNBC.com. Your primary income should go toward fixed expenses, while money from your side job should be used to pay down debt or build up savings. Your side hustle shouldn’t threaten your main source of income either. It’s a good idea to check with your employer before taking on any gigs. “The terms of your contract or the company’s conflict-of-interest policies may limit your options.” You should also think about why you’re taking on extra work. If it isn’t something that has the potential to advance your career or turn into a new full-time job, “it may be more beneficial to focus on snaring that promotion or raise at your main job.”
“While side hustles come with pitfalls, they may actually make you more appealing to employers,” said Melody Hahm in Yahoo.com. Juggling extra work shows hiring managers that you possess initiative and drive, as well as creativity. Just be sure you really have enough mental and emotional bandwidth to work two jobs. You also need to keep on the right side of the Internal Revenue Service, said Kelly Phillips Erb in Forbes.com. Any income from your side gig has to be reported, and you are responsible for paying self-employment tax. Save your invoices and keep careful records of your earnings and expenses, because that extra income “will not be reported by your employer on a W-2.” Try to stash what you earn in a separate account, to make record keeping easier, and keep detailed receipts, either by scanning them or holding on to the hard copy. If you expect to owe more than $1,000 in taxes, you’ll have to make estimated tax payments every quarter or face a penalty.