
Side Income and the Tax You Owe on It
Side income can face income tax and 15.3% self-employment tax. A $14,000 example shows why setting aside 25% is only a starting point.
See what a side income really pays once the start-up cost, the hours and the tax bill come off.
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Side income can face income tax and 15.3% self-employment tax. A $14,000 example shows why setting aside 25% is only a starting point.

Gather the forms your return actually needs, including the four records most likely to arrive after you think you are ready to file.

At an assumed 4% yield, $500 monthly takes $150,000 before tax. Compare nine income sources by capital, work and the risk behind the payment.

Budget on your lowest month, not your average. Seven of twelve months fall below an average, and on one freelancer's real year, budgeting on it would have spent the tax money exactly.
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