The Biggest Side Job Mistake
Everyone Wants To Make More Money
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.
Considerately yours, GROCO, GROCO Tax, GROCO Technology, GROCO Advisory Services, GROCO Consulting Services, GROCO Relationship Services, GROCO Consulting/Advisory Services, GROCO Family Office Wealth, and GROCO Family Office Services.
To receive our free newsletter, contact us here.
Subscribe our YouTube Channel for more updates.
This transcript was generated by software and may not accurately reflect exactly what was said.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
“Madoff” or “Ponzi-Type” Tax Losses
“Madoff” or “Ponzi-Type” Tax Losses Update: 12/9/09 Wall Street Journal Article: http://online.wsj.com/article/SB124623441944466541.html In addition to other good information about the type and amount of refunds people are obtaining it says in the last paragraph: “On Monday, Sen. Charles Schumer (D., N.Y.) proposed a bill that seeks to further expand the carry-back period up to six…
Military Family Tax Relief Act of 2003
Military Family Tax Relief Act of 2003 On Nov. 11, 2003, President Bush signed into law the Military Family Tax Relief Act of 2003. Among its provisions are these tax breaks related to military personnel: Death benefits The death gratuity paid to survivors of deceased Armed Forces members rises to $12,000 and is not taxable…
Voluntary Compliance Program for Withholding Agents
Voluntary Compliance Program for Withholding Agents In a memo dated February 25, 2005, the IRS Large & Mid-size Business Division, announced that based on recently received Chief Counsel Advice, withholding agents participating in the Section 1441 Voluntary Compliance Program (VCP) would not be subject to interest charges under certain circumstances. Section 1441 requires withholding agents…
Are Casualty and Theft Losses Tax Deductible?
Are Casualty and Theft Losses Tax Deductible? If your property is destroyed, damaged, or stolen due to casualty or theft, you may be entitled to a tax deduction. A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, and unusual. A sudden event is one that…