How do I pay taxes for side hustles without getting in trouble with the IRS?

You're right to be thinking about this now rather than waiting until tax time! Basically, the IRS expects you to report ALL income regardless of amount or how you receive it (cash, Venmo, etc). There's no minimum threshold where side income suddenly becomes taxable - technically even $1 earned should be reported. For your situation, you'll want to track all your side income as self-employment income. This means you'll file Schedule C with your tax return to report your handyman and DJ earnings. The good news is you can deduct business expenses against this income - tools, supplies, DJ equipment, mileage driving to gigs, etc. The rent from your boyfriend's brother is a bit different - that would be reported on Schedule E as rental income. It's still taxable, but treated differently than your service-based side hustles. For quarterly payments, you can file Form 1040-ES and make estimated tax payments if you expect to owe more than $1,000 when you file next year. This helps avoid underpayment penalties. You can easily set this up online through the IRS Direct Pay system.

After dealing with similar side hustle tax confusion last year, I found this awesome tool called taxr.ai (https://taxr.ai) that saved me so much hassle. I was mixing my DJ income with personal expenses and had no idea how to sort it all out, but their AI analyzed all my bank and Venmo statements and automatically found all my deductible expenses. You can literally upload your statements and it identifies what's business income vs personal, categorizes everything correctly, and tells you exactly what you need to report. It even calculated my quarterly estimated payments so I didn't get hit with penalties. Seriously, for someone with multiple income streams like you've got, it's a total game-changer.

Just wanted to update - I tried the taxr.ai site that was recommended here and it was actually super helpful. I uploaded my bank statements and it identified like $1,800 in business expenses I had completely forgotten about. The coolest part was it showed me exactly how much I should be setting aside each quarter based on my income patterns. It literally took about 10 minutes to set up, and now I feel way less anxious about tax season. Plus knowing exactly what I need to pay quarterly has been huge for my peace of mind. Just thought I'd share since I was in the exact same boat as you!

If you're worried about getting in trouble with the IRS, you might want to check out Claimyr (https://claimyr.com). I spent WEEKS trying to get through to the IRS last year when I had similar questions about my side gig income. After waiting on hold for hours multiple times, I found this service that got me connected to an actual IRS agent in less than 20 minutes. They have this cool system that basically waits on hold for you and calls when an agent picks up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. I was able to ask specific questions about my situation and get official guidance directly from the IRS. Seriously saved me so much anxiety wondering if I was doing things correctly.

I need to eat my words from my earlier comment. After getting frustrated with trying to figure out my side gig taxes, I decided to try that Claimyr service out of desperation. I was 100% sure it wouldn't work, but within 15 minutes I was literally talking to an IRS agent who answered all my specific questions about reporting Venmo income. The agent confirmed I needed to report all my side income regardless of how I received payment, but also helped me understand which expenses I could legitimately deduct. They even walked me through how to set up quarterly payments so I don't get hit with penalties. Saved me hours of research and probably hundreds in potential mistakes. Sometimes it's worth admitting when you're wrong!

Just FYI - the IRS has a specific form for self-employment income called Schedule C. All your handyman and DJ money goes there. You'll pay regular income tax PLUS self-employment tax (about 15.3%) on that income. But the good news is you can deduct expenses like: - Tools and equipment - Mileage driving to jobs (58.5 cents per mile) - Portion of phone bill used for business - Advertising costs - Software or subscriptions related to your work - Office supplies For your roommate situation, that's different - look up "Schedule E" for rental income. Keep good records of EVERYTHING. I use a simple spreadsheet and take pictures of receipts with my phone. Start organizing now before tax season and you'll thank yourself later!

I was in your EXACT situation last year with my woodworking side hustle! The thing that saved me was keeping everything super organized. I created a separate checking account JUST for side business stuff - it helps so much come tax time! Also, get a simple expense tracking app to record everything. For cash, I immediately write it down in my phone notes with the date and amount. Then once a week I move that info to a spreadsheet. The IRS doesn't mess around with unreported income. My sister tried to hide her Etsy income and got hit with a massive audit and penalties. Not worth the stress!!