Do you have to pay taxes on a side job? Here’s what you need to know
Income tax is not divided based on job and you will be taxed on both in your federal tax return.
Income earned from a side job is more often then not taxable, and you are required to report it on your federal income tax return. This applies whether your side job is a freelance gig, consulting work, or any other form of self-employment.
All income, including earnings from a side job, must be reported on your federal income tax return. The income you earn from your side job is considered taxable and you are responsible for paying both income taxes and self-employment taxes. Self-employment taxes cover Social Security and Medicare contributions.
If you earn more than $600 from a client or platform in a tax year, they may be required to provide you and the IRS with a Form 1099-MISC, which reports your income.
However, you are still responsible for reporting all income, even if you don’t receive a 1099-MISC.
Changing tax contributions for 2024
The income thresholds for tax brackets are adjusted to reflect inflation or the cost of living. The seven brackets remain the same next year 10%, 12%, 22%, 24%, 32%, 35% and 37% which were set after the 2017 Tax Cuts and Jobs Act.
For example instead of 10% being applied to the first $11,000 of income as in 2023, it will now be applied to the first $11,600 for a taxpayer filing individually in 2024.