Are you someone who makes money “on the side” or “under the
table?” In other words, do you earn or supplement your income with simple gigs?
These days, with so many money-making sites and services, such as Uber and
Elance, it’s quite easy to make money doing small gigs. However, you need to
understand that, if you make above a certain amount, you may qualify as an
independent contractor and thus need to file special tax forms and meet other
obligations.
Record Everything!
To start off with, if you do earn money through gigs, then
you need to make sure that you are keeping clear and detailed records of who
you earn money from and how much. That way, you can determine, preferably with
the help of a knowledgeable accountant, what your tax obligations are and how
to best meet them.
It can often be helpful, in addition to keeping detailed
records, to maintain a separate bank account just for your “gig money,” as well
as any relevant spending you do. This can help you to maintain a detailed and
easy to access record of gig-related spending and earning.
Deduct Where You Can
While paying taxes on your gig money may not be fun, there
are some upsides to being a “gig worker.” If you do your gigs from home, for
example, and you have a home office that you use exclusively for gig work, you
can get a nice tax deduction. Other deductions exist for the self-employed as
well, so be sure to discuss your deduction options with your accountant or
financial adviser.
Working gigs, whether you do it full-time or part-time, is a
great way to make money, but it can turn into a big hassle if you don’t know
how to properly manage your finances and taxes, so remember to seek
professional help as needed so that you can benefit as much as possible from
your gig working.
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