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
One option to consider is forming a legitimate home business that you can turn into a full-time venture in the future. If you treat this business as an integral part of your current revenue stream from the start, then any income generated may be subject to fewer or reduced taxes, depending on your local area. To avoid having any liability at all, it’s best to investigate tax regulations and take all appropriate steps legally to ensure that you do not have any outstanding liabilities owed by state or federal agencies. You should also consult with an expert accountant well-versed in self-employed enterprises and small business practices before making any financial decisions. In addition, research applicable deductions which could minimize how much income tax is paid overall. Taking the right precautions early on can help protect your potential profit and reduce hassle down the road when filing returns is due.
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
The best way to avoid paying taxes on your side hustle is to set up a business entity. Anything you earn as an individual is liable for income taxes, but if you set up as an LLC or sole proprietorship, the IRS considers those profits separate from your personal income and doesn't impose additional taxation on them. As a separate business entity, it will also be important to understand estimated quarterly payments and tax filings so that the right amount of money is paid in throughout the year; failure to do so can lead to penalties and additional fines. If it’s not already registered as such, discuss setting up a business with an accountant or lawyer specializing in this field. Best of luck!
assistant