Managing Your Income From Your Side Gig

It’s great to have a side gig. Whether you’re using your existing skills to generate some extra income or you’re pursuing your passion after hours, it’s a good way to boost your earnings. While it’s great to have the money come in, you need to learn to be smart with your money or else you could find yourself in trouble with the taxman. Here’s some useful advice on how to manage your income from your side gig.

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Open a second account

It’s tempting to keep all of your earnings in one place, but this can prove tricky when the time comes to file your tax return. A second bank account for your side gigs gives you details to provide those making payments, as well as a clear idea of what’s coming in and going out. If you keep your side gig earnings in your regular account, you could soon find that transactions get lost among the many lines, causing a big headache when it comes to doing the paperwork at the end of the year.

Save for your additional tax

When you’re working for an employer, your tax is usually all sorted for you as part of your paycheck. When you start working for yourself, however, and even just on an occasional basis - it’s up to you to manage your own taxes. Not saving for your taxes could leave you with a large bill to pay at the end of the year, so it’s better to learn to budget for your taxes to make sure you’re not left short. If you can, save more than what you estimate - this will protect you from any shortfalls and could make a nice bonus for yourself if you find that you’ve over budgeted.

Manage your returns online

It’s now much simpler to submit your tax return online. If you need some help with your reporting, then using an online generator for 1099 misc instructions 2017 could be the easiest way to get all of the information you need in one place. If you don’t have an accountant on side, this could be one useful way to manage your taxes without stress. Make yourself some spreadsheets to tackle all of your income and outgoings to make it easier for you to find what you need.

Invest some of it

Your side income can be a great little earner, which is great if you like to live a life of luxury on your average salary. However, it’s no bad thing to put some of your additional earnings into savings. Earning interest on your extra income will make it even more valuable, helping you to plan for retirement or even fully venturing out on your own in the future. Be wiser with your additional income and don’t just squander it - you’ll be disappointed when you have nothing to show for it later down the line.

Learning to manage your side gig income is an important step in the world of freelancing. Need some help breaking the freelance mould? Take a look at these great tips for avoiding common freelance traps and learn to make your side gig a successful one.