Gig apps, odd jobs, reselling and freelancing — how to judge the real hourly pay and handle the tax
Side hustle income is money earned outside a main job: delivery and rideshare shifts, odd jobs through task apps, pet sitting, reselling, tutoring, small freelance projects. It is quick to start and flexible, and the headline pay figures are almost always before the costs that decide whether it is worth doing.
Take what you were paid, subtract platform fees, supplies and vehicle costs, then divide by every hour spent — including driving to jobs, waiting for orders and messaging customers. Many gigs that look like $20 or more an hour fall well below that once time and costs are counted, and a part-time job can beat them.
Side income is taxable whether or not you receive a form. App and freelance work is self-employment income: report it on Schedule C, deduct business expenses, and pay self-employment tax once net earnings reach $400. If you drive for work, the IRS standard mileage rate (which changes each year) or your actual costs can be deducted — which is why keeping a mileage log matters. Setting aside a share of each payment, and making quarterly estimated payments if you will owe $1,000 or more, avoids a surprise in April.
Start from what you already have — a car, a skill, free evenings, a spare room — and the hours you can reliably give. Short-term cash needs favour gig work and selling things you own; longer-term goals favour skills that can be priced higher over time.
Not tracking mileage and expenses, chasing low-paying orders to hit volume, ignoring vehicle wear, skipping tax savings, and paying upfront fees to "unlock" work — a common sign of a job scam according to the FTC.
A side hustle that nets a few hundred a month can clear consumer debt years early. Compare the snowball and avalanche order for your balances.
Related reading: Active Income.
Yes. All income is taxable whether or not you get a 1099. Self-employment tax applies once net earnings reach $400 in a year.
Usually one built on a skill clients pay for — bookkeeping, design, writing, tutoring, trades — rather than app-based gig work, where the platform sets the price.
Tax rules, limits and pay data change. Check the current figures with the primary source before acting on them.