Millions of Americans juggle two jobs or more, and moonlighting for many has become the new normal.
Whether your side gig is for a rainy day fund–or more like an addition to a full-time career, the government is going to want their share.
“Uber, AirBNB… we’re seeing a lot more people getting into the gig economy,” said Katherine Pickering, the executive director of the tax institute at H&R Block.
What a lot of people seem to forget is that you’ve got to pay taxes on that income.
If you’re working that second-shift for a business, it’s pretty simple: your employer will deduct withholding taxes from your paycheck.
But things can get complicated if you’re self employed— running a business from your home— or working in cash heavy careers like bartending.
“When you’re working for yourself, there isn’t anybody else who’s withholding those taxes or paying taxes on your behalf,” Pickering said.
But, there are some serious tax advantages for self-earners–including a whole host of deductions.
Among the most common:
-Portion of your home used—think about that home office
-Mileage of your car used, especially if you’re driving for Uber or Lyft
-Tools and equipment
-Even tuition for related education.
“This other trend that we’re seeing the homesharing, the Airbnb, those kinds of things…and this is a really exciting way to maybe make a little more income. What you need to be careful of is not to become an accidental landlord,” Pickering said.
Be advised: if you rent out your home for more than 14 days, you could fall into that “landlord” category. Checking your local laws and regulations is a must.