In today’s economy, part time jobs (affectionately called side hustles) are just as common as Twitter followers for pop stars. Whether it is to save up for a trip of a lifetime or to pay off credit card debt, more Americans, particularly millenials, are embracing part-time jobs.
With the holiday season coming soon and retailers hiring scores of temporary employees, it is prudent to revisit the obligation of paying taxes on income from part-time jobs.
A recent Forbes.com report revealed that 69.8 million Americans fail to report income from side businesses and part-time employment each year. This amounts to $214.6 billion in income that is not reported to the IRS.
As we alluded to earlier, millenials are probably the most likely group to omit such income from their tax returns, but more than a third of high wage earners (those making between $150,000 and $300,000) fail to report income from side gigs. As we have noted in prior posts, the IRS suspects that those with more taxable income are more likely to hide such income.
The Forbes.com report also revealed that most people who don’t report their part-time live outside California. But this should not be comforting to those who have not reported side hustle income. Failing to report income could lead to stiff penalties and interest. Nevertheless, if you are suspected of not reporting taxable income and are notified of an audit, an experienced tax attorney can advise you of your rights and options.
The preceding is provided for informational purposes only and is not legal advice.