Question: “With side hustles…isn't there business tax obligations?? I'd love to have one, but turned off by having tax obligations/having to open an actual business…“.
If you want me to go bananas tell me you aren’t doing something in America right now because of taxes. Taxes for nearly everything are at historical lows. Taxes right now shouldn’t be a barrier for much of anything.
There are tax obligations to having a job. You would save more in taxes if you didn’t have a job, right? Same idea.
Never let the fact that the government gets a tiny percentage of your income stop you from getting more income. You always come out ahead by earning more money.
To keep your costs low, just start your business and pay nothing for a few weeks until you make your first few hundred bucks. This is called a DBA (doing business as). It’s not wise to do that long term, but it’s wiser to do that and use the money you earn to finance getting set up and paying the business taxes (such as they are) than to let not having a few hundred dollars to cover the taxes stop you from starting.
The taxes associated with a business are negligible in my experience. It’s also like saying “hey, there’s 6% sales tax, so don’t buy anything”. If you can’t cover the 6% tax, you shouldn’t buy the thing, but usually the tax is the least of your concerns.
The next question I’d have is what business taxes are you referencing? A S-corp or a LLC (the most likely small business structures) pay zero dollars in federal income tax. So that shouldn’t stop you.
You will have to register your legal entity with the state, and you’ll likely pay a little for that. I couldn’t remember how much it was for Florida, but a LegalZoom article says around $100, and that sounds about right. You can ask Google about your state.
You should also get a business license with your city (if you are inside the city limits). If you are outside the city limits, you should get a business license with the county. Ours here in Florida was less than $30 (I believe $28.50 to be exact).
In Atlanta we did have to pay a tax each year based on revenue. It was about $650 for about $500,000 in revenue and went up if you earned more and down if you earned less. I don’t think this exists in Florida.
If you REALLY want to start a business and REALLY are worried about taxes, call any CPA that does small business returns in your area and ask them what the usual tax burden is there. You will probably pay more for the CPA to help you with your business tax return than you will pay in business taxes in a year.
If taxes were so high as to stop all businesses from being viable, there wouldn’t be any businesses where you are. 🙂
If you just don’t want to start a business that’s ok – there are side hustles where you could be a part time employee. A side hustle does not have to be a separate business.
If you just don’t want to side hustle, that’s ok too. Are there ways you could be more valuable to your current employer? What would you need to do to move up/make more in your current role? Is there a different job within your current company you could do to earn more?
Companies are almost always looking for good sales people, and it almost always pays well, but people usually won’t do it because it is scary and uncomfortable. I can appreciate that. It’s totally fine to pick being comfortable over making more money, but I think it’s important to be honest that we have the power and are choosing not to use it rather than feeling like victims like there are no options for us.
There are lots of ways to earn money, your brain just isn’t wired to look for them yet. Keep at it and you will start to notice opportunities.
It’s totally ok to just not choose to do something, but taxes shouldn’t be your reason. It’s even a great time taxwise to die as estate taxes are at historical lows. Not that I’m recommending that as a money making strategy – it’s definitely not a long term plan. 🙂
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