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Yes, You Have to Pay Taxes on Your Side Hustles — and Lots of You Aren’t
It turns out that along with hating to settle for a single job, side hustlers also hate telling the whole truth to the U.S. government.
Take a look at the number of people who report to the government that they’re actually working a side gig: As of August, only 3.8 million Americans say they work a second job, according to the U.S. Bureau of Labor statistics. Other studies peg that number at 19% of the working population — or 30.5 million people.
But, more importantly, a striking number of side-giggers fail to report their income to the Internal Revenue Service. And it’s a huge problem.
Millions of Americans Aren’t Paying Taxes on Their Side Jobs
About one-fourth of Americans are getting their side hustle on but not filing taxes for those gigs with the U.S. government, according to a July study by finder.com.
That’s nearly 70 million people failing to declare $214.6 billion in income.
Even if you just look at working-age adults in the U.S. (205,373,000), that means 51.3 million people aren’t declaring $159.8 billion in income, according to the percentages found in the study.
And you bet Uncle Sam wants his piece of all that scratch.
Yes, You Need to Declare and Pay Taxes on Your Side Job
Millennials are the biggest tax scofflaws, accounting for 33% of those not filing 1099s, the survey says.
We get it, you probably just didn’t know that you need to file taxes for earnings from your side gig. You were probably just too busy hustling to look up the fine print.
So yes, you have to pay those taxes.
Think you’re smarter than the IRS? We wouldn’t suggest testing that unless you’re ready to get bogged down with all sorts of interest and fees.
As the great philosopher Christopher Wallace once said: “More money, more problems.”
Alex Mahadevan is a data journalist at The Penny Hoarder.