- Posted June 26, 2020
The Benefits of Starting a Side Hustle
Far too often, your day doesn’t take advantage of all the skills and abilities that you have. Do you have a hobby that could generate a little income? Or do you have some skills that are marketable? If you do, you might want to start yourself a side hustle. There are so many ways that you can benefit your life by doing so.
More Financial Security
Financial security is a big deal for most people. If you get laid off, do you have a way to sustain yourself while you find a new job? Your side hustle may not generate a lot of money, but it will help you stay afloat while on the job hunt. In fact, you might discover that you can make more money and have more fun with the side hustle if you work at it full-time.
Jump Start Your Retirement
These days, it seems like the age of retirement is getting further and further away. If you ever want to be able to retire in peace, you need to start planning for it now. You can use your side hustle income in a solo 401(k) to help boost your retirement savings. You can also take that money and invest it in other places.
If you want to use your side hustle to retire, you may need to turn it into a formal business. This is going to require some capital. If you are going to borrow that capital, you are going to need a good credit score. An EIN is also required to obtain a business loan or line of credit.
You might think that your side hustle income is tax free, but it isn’t. In fact, you could face some serious problems if you don’t pay taxes on this income. However, by starting a side hustle, you can open up the door to several tax incentives. You will have to pay self-employment tax, but you may qualify for a standard business deduction. You can also deduct a lot of your expenses from your taxable income. This will require that you carefully track your expenses and thoroughly read through tax documentation. Properly done, you can save a lot of money. Improperly done, and you could face some serious financial consequences.
If you are going to start a side hustle, make sure that it is a side hustle that you enjoy. The side hustle is going to take a decent amount of time. If you enjoy that time, then the money will be a bonus. If you don’t enjoy that time, you may not have the motivation to make it work.
We can help you make a plan to ensure the best financial future for your business. Contact us today so we can help you achieve financial security!