Question 1

Why is my side hustle taxed so heavily?

Accepted Answer

Side hustle income is taxed at your marginal income tax rate PLUS 15.3% self-employment tax (Social Security and Medicare). Since it stacks on top of your W-2 income, it's often taxed at a higher bracket than your regular paycheck.

Question 2

What counts as business expenses?

Accepted Answer

Deductible expenses include supplies, equipment, mileage, home office costs, software subscriptions, marketing, and any costs ordinary and necessary for your side business.

Question 3

How is the hourly equivalent calculated?

Accepted Answer

The hourly equivalent assumes 20 hours per week of side hustle work and divides your annual net take-home by total hours (20 x 52 = 1,040 hours).

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