Have a side haste? Here's What You Need to Know About Filing Your Taxes – Motley's Fool

Millions of Americans take over their usual work, whether it is to increase their savings, to repay their debt or to have more money, for their leisure and their holidays. If you have a secondary job, reporting your taxes can get a bit complicated, especially if you usually report a single income from a salaried job and call it back every day. Here are some things to know before you prepare your next tax return.

1. You must declare all your income

Whenever you earn money, whether from your main job, your investments or your bank account (in the form of interest), the IRS unfortunately receives a share . As such, you are required to declare any income you earned at your second concert, even if it is of a relatively small amount.

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You should get a 1099 form, in electronic format or by mail, from each company that paid you $ 600 or more last year. The IRS will also receive a copy of every 1099 that has been issued to you. So do not think about sticking these forms in the trash and pretend that they do not exist. If the IRS finds a registered income that you do not recognize in your return, it could easily open the door to a tax audit. That said, you do not just declare your income simply because you did not receive 1099 for it.

2. You can deduct expenses that helped you do your job

The saying "it takes money to make money" is generally true in the mad world. Often, you will need to invest some of your own resources to do this second job. The good news is that the IRS allows you to deduct these expenses on your tax return, thus reducing your total tax burden.

What expenses could you deduct? It depends on the nature of your work, but as a general rule you can deduce material or supplies directly related to your work. For example, if you worked informally independently and purchased cables and routers, these costs are deductible. If you sold your hand-made clothing, your yarn or knitting supplies are also deductible. If you have worked for a carpool company, you can claim several vehicle-related charges, such as mileage, insurance and even car wash. And if you are planning a space in your home for your secondary work (for example, to help a child or to do graphic design), you may consider applying for a home office deduction.

If you are not sure of the expenses that you are allowed to deduct for your side, you should consult a tax specialist. Spending a small amount for personalized advice can help you get the tax benefits you are entitled to.

3. You may owe money to the IRS if you have not paid estimated taxes during the year

When you take a salary as a salaried employee, the amount you will receive will match your after-tax earnings because your employer will withhold the appropriate amount of tax for the purposes of the IRS. However, when you make money, you will often have to pay taxes yourself. Therefore, if you have not paid your estimated taxes for 2018, you may land in a situation where you owe money to the IRS this year.

Keep in mind that if you pay too little for your taxes, the IRS will hit you with a penalty. If you plan to continue to earn regular employment, plan to pay quarterly taxes to avoid any problems in the end. For 2019, quarterly taxes are due on April 15 (filing deadline), June 15, September 15, and January 15, 2020.

Having side stress is a great way to increase your cash flow and, in some cases, to go even further in your career. Just be aware of the tax implications involved, for better and for worse.