EVERYONE WANTS TO MAKE MORE MONEY.
Updated June 4, 2021 Who doesn’t want more money? For many that means picking up a side job to earn a little more cash. There are literally hundreds of side jobs out there and while most are only good for a few extra dollars, some can bring in enough to be a significant help with finances. However, there is a danger to doing work on the side if you are not careful.
If you work as an employee you don’t have much to worry about, but if your side gig is something you do as a self-employed worker, you need to be aware of the tax implications. As it turns out, this is one of the biggest problem areas for people who work side jobs, especially for younger people.
The problem is many Americans are not reporting this extra income. In fact, according to a recent study from Finder.com, roughly a fourth, or 69.8 million, of all Americans who make money from a side job neglect to report it on their taxes.
That adds up to a large junk of change according to the IRS. The tax agency claims that tax evasion costs the government more than $450 billion a year. Of course, that figure is not all from unreported side job income, but the IRS says nearly $215 billion of it is.
That is a lot of money, which is why the IRS takes reporting your side job income seriously. If you get caught not reporting this extra money it could cost you. The IRS can charge you as much as 5 percent for each and every month you are late paying on those taxes. Furthermore, if you don’t report and pay an accurate amount, you could end up paying additional penalties and interest, as well face criminal charges.
So if you walk dogs, repair cars, teach music lessons, babysit, do a little writing on the side, earn money on YouTube, or anything else to make a few extra bucks, be sure you report that income to the IRS.
We hope you found this article about the Biggest Side Job Mistake helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or home page www.Groco.com. Unfortunately, we no longer give advice to other tax professionals gratis.
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