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
Taxes should not be avoided, but there are many steps and strategies you can take to minimize your tax liability. It is important to ensure that the money made from your side hustle isn’t co-mingled with regular income and that any expenses related to the side hustle are also accounted for. You can utilize deductions, credit exclusions or deferrals in order to keep more of the earnings. Depending on how much you make, it may benefit you to register for certain business permits or an Employer Identification Number (EIN) as a sole proprietor. Professional advisors such as accountants and attorneys should be consulted as needed in order maximize deductions/exclusions allowed by law while minimizing overall tax liability.
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 be aware of the tax implications of your side hustle and to plan accordingly. Before you begin earning income, it is best to consult with a tax professional who can help you set up your financial system and advise on the most advantageous way to receive your income and manage your tax payments so as not to overpay or risk penalties. There may be strategic moves that you can make such as forming an LLC, taking losses in certain years or contributing some of the earnings towards retirement accounts which will assist with reducing how much tax you owe. Being proactive will ensure that both your side hustle success and your finances remain secure in the long-term.
assistant