If you’re juggling multiple side gigs—whether it’s freelancing, rideshare driving, or selling products online—accurately reporting your self-employed income is essential. Let’s break it down step by step so you’re prepared come tax time.
1. Track All Income Sources
Start by keeping detailed records of every dollar you earn from each gig. Whether you’re getting paid via direct deposit, PayPal, Venmo, or in cash, it all counts. Don’t rely solely on 1099s—some clients may not issue them, but you’re still responsible for reporting that income.
2. Stay Organized With Bookkeeping Tools
Use a bookkeeping app or a simple spreadsheet to log income and expenses. Keeping separate records for each income stream can save you major headaches when it’s time to file your taxes. This also helps if you ever need to show proof of income or apply for loans.
3. Understand the Forms You’ll Need
As a self-employed individual, you’ll typically file a Schedule C to report your income and expenses. Any 1099 forms you receive from clients will be included here. But remember: no 1099 doesn’t mean no reporting. The IRS expects you to report all earnings, documented or not.
4. Deduct Eligible Business Expenses
Lower your taxable income by tracking and deducting business-related expenses. These might include:
- Supplies and tools
- Mileage and travel expenses
- Software subscriptions
- Home office costs
Make sure to keep your receipts and documentation—these deductions can make a big difference.
5. Plan for Quarterly Estimated Taxes
Unlike traditional employees, self-employed individuals don’t have taxes automatically withheld. That means you may need to pay estimated taxes quarterly to stay compliant and avoid penalties. Check the IRS guidelines or talk to a tax professional to determine what you owe.
6. Keep It Simple—and Ask for Help If You Need It
Managing multiple streams of income can feel overwhelming, especially if taxes aren’t your thing. But with the right tools and a little organization, you can stay on top of it.
Need guidance? Paragon Accountants is here to help. From setting up your bookkeeping to filing your taxes, we’ve got your back—so you can focus on growing your business.
