If you were left surprised (and maybe a little hurt) from your latest tax return and you work as both a W2 employee and have 1099 side gigs, this article is for you.
The Current State of the Side Hustle
The side hustle is a common part of our society today. The latest figures say that nearly 40 percent of Americans have a side job that brings in $8,200 or more each year.
People who work a side job are more likely to be millennials, apparently working more than one job is something that is less common as you age.
And while the extra money is nice, these side hustles make it that much more complicated to do your yearly taxes. If you make more than $600 at any job, that money is taxable.
That’s why its good to get a head start by adjusting your W2 withholdings to help cover the income from your side hustles. Otherwise, you’ll undoubtedly owe
How Do You Do This?
The recent tax law changes impacted many taxpayers, so the IRS created a withholding calculator.
It’s an easy-to-use tool, you just need to come prepared with the proper paperwork.
- Any and all recent pay stubs and invoices(make sure it includes the amount of federal taxes withheld for this year so far
- A completed copy of your 2018 and 2017 returns
Then open the calculator and answer all the questions. You may not be happy with the amount of taxes you have taken out, but you’ll happier come tax time, so you won’t owe for all your hard work in 2019.