Not everyone has enough money to live a cozy, comfortable life so they turn to a side hustle. Are you part of this revolution? There are many reasons to jump on the bandwagon, including earning potential and accessibility. It’s never been easier to make money and turn your passion into a potential career.
This sounds great. In fact, you’re probably wondering what has taken you so long. Well, everyone has commitments so don’t beat yourself up too badly. Anyway, taking your time to kick-start a side hustle is a savvy move because it isn’t as straightforward as creating a blog. The idea is only one aspect because there are financial and legal elements, too.
The cold, hard truth is that a side hustle could result in a huge fine. Yep, $1mn seems like an exaggerated amount but plenty of people have run the gauntlet. To make sure you get out the other side, here’s how to avoid unnecessary penalty fees.
Hire An Accountant
Tax is without a shadow of a doubt the main culprit here. Because it’s a hobby, it’s easy to assume that you don’t have to declare anymore to the IRS. Sorry, but that’s not the case. The Internal Revenue Service wants their pound of flesh and they will get it one way or another. Even the money that keeps you above the breadline isn’t sacred with these guys. So, declaring the amount is the first step to avoiding a fine or even a jail sentence. Then, you have to ensure the total is in the right ballpark. Finally, you don’t want to overpay because it takes months to get back the money. As you can see, tax law is complicated so it’s best to have an expert by your side. With an accountant’s help, they will tell you what you have to declare and how to slash the costs.
Set Up A Debit
Have you ever heard of an ACH? The term stands for Automated Clearing House, which is an electronic and money transfer money network. This guide on payments will provide clearer insight for those who need additional information. The pertinent point to remember is that it’s a simple method of paying or receiving cash without entering card details. In short, you don’t have to input a credit card number every time you need to clear a balance. An ACH will store it in the memory banks and sanction the cash until you say stop. The obvious advantage is that you can set up a debit and never have to worry about it again. On the same date every month, the amount will be paid to the creditor without any snags or hitches. Of course, this means there are fewer chances of incurring bank charges because you won’t forget.
Follow Privacy Rules
Invest In Insurance
Aside from an investment in the stock market, you can get a policy for almost anything. Business insurance is one of the biggest industries on the globe because CEOs make mistakes. And, when they do, it can cost companies millions of dollars. Take a data breach as an example. The government knocks on your door and says: “You’re to blame. You owe $1mn and it has to be paid in one month’s time. Good luck.” Appeal all you want, but the deadline is strict and the process can take years. In the short-term, you have to figure out how to stump up the cash. The only way to do it, unless you know a billionaire, is to rely on your insurance policy. Yes, the premiums will increase, but that’s better than a million dollar debt.
So, is your side hustle liable or have you take the right steps to protect yourself?