Side Hustle Taxes: What You’ll Actually Keep

Made some money on the side — freelancing, reselling, driving, a bit of consulting? It’s taxable, and it’s taxed less gently than you might hope. Knowing the rules upfront keeps April from becoming a nasty surprise.

How side income is taxed

Side-hustle profit stacks on top of your regular income, so it’s taxed at your marginal rate — the highest rate you already reach. On top of that, self-employment income over $400 a year owes 15.3% self-employment tax (both halves of Social Security and Medicare) — see the self-employed taxes guide.

Quarterly estimated taxes

There’s no employer withholding on side income, so if you’ll owe more than about $1,000, the IRS expects quarterly estimated payments (roughly April, June, September and January). Skipping them can mean an underpayment penalty.

Deduct your expenses

You’re taxed on profit, not revenue — so legitimate costs (equipment, software, mileage, a home-office share, platform fees) reduce what you owe. Keep records and a separate account if you can.

The forms

• 1099-NEC / 1099-K — platforms and clients report what they paid you.
• Schedule C — where you report profit and expenses.
• Schedule SE — calculates your self-employment tax.

Estimate the bite

To get a feel for the income-tax portion, add your expected side profit to your salary in the calculator and watch your marginal rate — then remember to add the 15.3% self-employment tax on the side income.