Side Gig Taxes

[royalkangaroo]

Just curious as to what people do for claiming taxes if they're operating a small side detailing business.

Are you filing a schedule C as a business and claiming your expenses?

Interested in what's needed when you head down the road of business cards and advertising vs polishing a buddy's car for a few bucks and a 12 pack.

 

[zmcgovern45]

Yes, 1040 Schedule C. Keep track of your income and expenses. File quarterly tax estimates if you want to avoid owing it all at tax time. It is quite simple. You can utilize programs like “Turbo Tax Self Employed” to make it even easier on yourself.

I believe the IRS has limits of when you have to claim extra income? I might be mistaken on this, but I thought something like if you earned $600 or less then you don’t have to claim the income? I didn’t pay that much attention since we made more than that in a single job most of the time . Check the IRS website. They had good resources for small businesses.

Some states will require you to collect sales tax on your services as well, while others only require sales tax on goods, not services. Check with your state.

 

[zmcgovern45]

If you are operating under a fictitious name (meaning a name other than your own) you will have to file a DBA. Check with your state on the proper process for doing that as well.

You can also read up on the various business types as well... sole proprietor, LLC, etc.

 

[Route246]

It is best to get advice from a CPA or enrolled agent. Everyone's situation is different. You can deduct business expenses which can enable you to operate at a loss for at least a few years and not have tax liability. There are limits as to how many years you can claim losses but I ran a side business and wrote off everything relevant to that business. Startup costs are significant.