Tax Compliance for Side Hustlers Gains Attention
Key Questions
What is the self-employment tax rate for side hustlers?
Self-employment tax is 15.3% FICA on 92.35% of net earnings, with the employer half deductible above-the-line. Health insurance premiums can be deducted 100% above the line under Section 162(l).
When are quarterly estimated taxes due for gig workers?
Quarterly estimated taxes are due June 15, with 6% IRS interest compounding daily on underpayments. Safe harbor rules allow basing payments on 100% of prior year tax to avoid penalties.
What are the current reporting thresholds for payment apps like Venmo?
Payment apps now report to the IRS only above $20,000 and 200 transactions, reducing paperwork for most users. A $400 net from self-employment still triggers SE tax and reporting regardless of forms.
With summer side hustles approaching, guidance on self-employment tax (15.3% on 92.35% of net earnings), quarterly estimated taxes due June 15, and safe harbor rules is essential. The $600 Venmo threshold is dead; reporting applies only above $20k/200 transactions. A freelancer rate calculator highlights the SE tax blind spot. The $400 net threshold for SE tax reaffirmed.