Don’t Let Your Side Hustle Surprise You at Tax Time

We get it. That side hustle started as a way to make a little extra cash, not a full-blown business. But guess what? The IRS doesn’t care if you meant to be a business—they just want to know if you made money.

So here’s a friendly heads-up: If you made over $400 doing gigs, freelancing, or selling anything (yup, even those Instagram sales or vendor market weekends), the IRS considers that taxable income. And yes, they want their cut.

What You Should Do Now:

1. Track Your Income (Even the Cash Apps)

Cash App, Venmo, Zelle... if clients paid you through them, it's still income. Keep screenshots, invoices, or deposit records just in case.

2. Save for Taxes

Set aside at least 25–30% of what you earn from your hustle. That way, you’re not panicking when the tax bill hits.

3. Know the Deductions You’re Entitled To

Bought supplies? Drove to a gig? Paid for a website? All of that may be deductible. A good bookkeeping habit now = major relief later.

4. File the Right Forms

Most side hustlers will file a Schedule C with their personal tax return. If that sounds like gibberish, we’re happy to walk you through it.

What If You Used Cash App for Business Expenses, Too?

Let’s say you also spent money using Cash App—paying a contractor, buying supplies, or covering event fees. That counts too!

Here’s what to do:

1. Categorize Your Transactions

Go through your Cash App activity and separate business expenses from personal ones. Label and log them so you’re not digging through at the last minute.

2. Save Your Receipts or Screenshots Digital receipts are fine—just make sure you have some kind of proof. A screenshot of a Cash App transaction + a product description or invoice goes a long way.

3. Sync It With Your Bookkeeping

Cash App doesn’t always integrate smoothly with accounting software, so you may need to manually enter those transactions. It’s a little tedious, but totally worth it.

4. Know What’s Deductible

As long as it was a necessary business expense, you can probably write it off. Just make sure you document it well.

BONUS for Business Owners:

If your side hustle became your main hustle this year, congrats! But that also means it’s time to think about LLC formation, bookkeeping systems, and maybe even quarterly taxes.

You don’t have to figure it all out on your own.

👉🏾 Book a Tax Strategy Call

Let’s keep that hustle profitable and IRS-compliant.

—In The Moment Financial Services