Do you have a side-hustle or other ways to make a little extra cash? I do, and If you’re reading this, you probably do too. I am sure it is quite rewarding. The funds I make from my side-hustle allow me to make extra mortgage payments and fund my many investments in an attempt to retire early. Whatever your side gig may be, do you pay taxes on it? Should extra income be taxed at all? Here my thoughts on it.
Should Extra Income Be Taxed?
If you ask me should extra income be taxed, I say no. Maybe if all jobs paid living wages or better, there wouldn’t be a need to make extra money for some people. When people are trying to get ahead or better their financial position through side work, let them keep it with minimal taxes or none at all. With that being said, taxes are always going to be around. The government is always going to get a cut of what you make. The funds are for all kinds of projects and safety net programs beneficial for all of society.
How To Avoid Tax
Taxes on extra income are not going away anytime soon. Instead, try to limit your taxable wages. You can do this in a number of ways. If you have a steady full-time job, put more money into your 401k or other workplace investment accounts. You can also open up an IRA and contribute the max. Aside from tax advantage accounts, be sure to keep all your business expense receipts handy during tax time. Make sure you keep track of mileage if you are using your car as a part of your business. If you work from home, make sure you have a dedicated office space to take advantage of the home office exemption.
Extra income tax should not exist, but it does. If you want to keep more money in your pocket, take advantage of tax-saving investment accounts and keep track of business expenses. For more ideas on how to keep your extra income out of the hands of the IRS, watch the posted video.