Remember: Side Hustle Income Is Taxable, Even If You Only Earn an Extra $500 for the Holidays
With December just weeks away, are you thinking about ways you can earn extra money for holiday gifts or even winter travel? Consider a side hustle.
According to a LendingTree side hustler survey of 2,050 participants, gig workers earned $1,242 a month in 2026, up from $1,215 in 2025 and $473 in 2022. Side hustles may include pet sitting, childcare, online consulting, virtual assistant work, delivery services and seasonal work such as gift wrapping, among others.
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Here's a look at the data on side hustles and tax responsibilities to help you decide whether a side hustle is worth it for your budget. According to the survey, these are the most common side hustles among people who work one or more gigs outside of full-time employment.
On-demand gigs, such as food delivery, drivers, babysitters, taskers and more (29%)
Freelance work and professional service providers selling their expertise (26%)
Creative, content and media production (23%)
Home improvement and skilled trades (21%)
Home services, mainly alleviating the need to do chores oneself (17%)
Financial and property service providers to optimize investments and businesses (16%)
Event services such as entertainment, planning, catering, etc. (12%)
As a Gig Worker, You Are Responsible for Paying Taxes
Side hustlers need to pay Uncle Sam. If you earn $400 or more in net income as an independent contractor from a side gig, you must pay quarterly taxes, according to the IRS. Gig workers must pay estimated taxes three times a year. If you don’t pay on time, the IRS charges a penalty.
Here is the timeline for quarterly tax due dates:
April 15: Money earned between January 1 and March 31
June 15: Money earned between June 1 and August 31
January 15 of the following year: Money earned between September 1 and December 31 this year
If any of these dates fall on a weekend or legal holiday, you may make the payment the following day.
If you’re an employee and have a side hustle, you may avoid paying estimated taxes by having your employer withhold more tax from your paycheck. You can use the IRS Tax Withholding Estimator to estimate what you’ll owe.
Some business expenses may be tax-deductible. Consider whether the side hustle you choose is worth it based on the taxes and expenses, such as car upkeep, which you may not be able to claim.
Speak to a tax professional to see how much you may owe, which deductions you qualify for and whether you’ll receive a refund. If your expenses are too high, you may want to choose a different gig, such as working remotely, providing childcare or pet sitting for neighbors.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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