How to Handle Taxes When You Have a Side Hustle ?

If you’ve picked up a side hustle — whether it’s DoorDash, hair braiding, tutoring, photography, or selling on Etsy — the IRS considers it a business. And that means your taxes work a little differently than they do with a regular W2 job.

Here’s what you need to know to stay organized and keep more of your money.

1. You’ll Likely Receive a 1099

If you earn $600 or more from a company or platform, they’ll send you a 1099NEC or 1099K. Even if you don’t receive one, you still have to report the income.

2. You Can Deduct Business Expenses

This is where side hustlers save the most money. Common deductions include:

• Supplies and materials

• Mileage or vehicle expenses

• Software and apps

• Home office

• Marketing costs

• Equipment (camera, tools, laptop, etc.)

If the expense helps you earn money, it’s likely deductible.

3. You May Need to Pay Quarterly Taxes

Side hustlers often owe because no taxes are withheld. Quarterly payments help you avoid:

• Penalties

• A big surprise bill in April

4. Keep Your Records Clean

Set up:

• A separate bank account

• A simple bookkeeping system

• A place to store receipts

This keeps tax time stress-free.

What This Means for You

A side hustle can be a blessing — but only if you manage it like a business. If you’re unsure what you can deduct or whether you need quarterly payments, RLA can walk you through it.