I Asked ChatGPT for Money-Saving Tax Hacks for Side Hustlers — Here’s What It Said
These days, it seems like everyone has a side hustle: your relative who drives rideshare, your friend with a graphic design business — heck, you’ve started selling vintage toys and clothes on Etsy. While everyone may share tips about branding and balancing gig work with your 9-to-5, they’re likely not talking taxes — unless it’s to complain.
Cathartic as that may be, it’s not as helpful as knowing a few tax hacks that can help you save money as a side hustler. So where do you turn for quick answers? I asked ChatGPT. Here’s what it said.
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1. Deduct Legitimate Business Expenses
It’s no wonder the AI called this “your biggest win.” Deducting anything that is “ordinary and necessary” for your business can reduce your taxable income — and you likely have more deduction options than you think, including:
Home office (even a small dedicated workspace)
Internet (business-use portion only)
Phone (business-use portion only)
Software subscriptions (Canva, Adobe, Notion, etc.)
Marketing and ads
Business travel (mileage, parking, airfare, hotels)
Equipment (laptops, cameras, lighting)
Education related to your business
To drive the point home, ChatGPT offered a hypothetical example: “If you made $20,000 and deducted $8,000 in expenses, you only pay tax on $12,000.” That really is a big win.
2. Take the Home Office Deduction
You’ve probably heard of this one, but ChatGPT says it remains one of the most underused deductions among self-employed workers.
If you use part of your home “exclusively and regularly for business,” you may be able to deduct a portion of:
Rent or mortgage interest
Property taxes
Insurance
There are two ways to calculate the deduction:
Simplified method: $5 per square foot (up to 300 square feet)
Actual expense method: May yield larger savings, depending on your expenses
If you’re eligible, it’s worth taking advantage.
3. Track Mileage
This tip makes obvious sense for rideshare drivers and delivery workers. But it applies more broadly. If you drive for client meetings, supply runs or other business-related errands, you may be able to deduct mileage.
“You can deduct the IRS standard mileage rate (changes yearly),” ChatGPT said. “Apps like MileIQ and Everlance make tracking easy.”
According to the AI, this approach can save some side hustlers thousands of dollars.
4. Deduct Health Insurance Premiums
If you’re fully self-employed and not eligible for employer-sponsored coverage — including through a spouse — ChatGPT suggests deducting the health, dental and vision insurance premiums you pay out of pocket.
“This reduces your adjusted gross income, which also lowers other taxes,” the AI said.
Keep in mind, the deduction cannot exceed your net self-employment income for the year.
5. Open a Solo 401(k) or SEP IRA
This one’s a win-win. By contributing to a solo 401(k) or SEP IRA, you can build retirement savings and potentially reduce your tax bill. ChatGPT notes that you may be able to contribute as both the employee and the employer if you have no full-time employees other than a spouse.
“This can reduce taxable income by tens of thousands,” the AI said.
Everyone’s situation is different, but exploring this option could lower your taxable income while helping you build a more secure retirement.
6. Pay Quarterly Taxes
Paying quarterly taxes isn’t exactly a hack, ChatGPT admits — but it’s critical to avoiding penalties. The AI suggests setting aside 25% to 30% of profits in a separate savings account.
Quarterly estimated tax payments are generally due April 15, June 15, Sept. 15 and Jan. 15. If a due date falls on a weekend or holiday, the payment is due the next business day.
If you expect to owe at least $1,000 in taxes, the IRS generally requires you to make estimated payments throughout the year.
The Bottom Line
Side hustling doesn’t have to be a tax headache. A few smart moves could save you hundreds — if not thousands — of dollars.
That said, while AI can provide baseline information, you’re likely better served by consulting a tax professional who can offer personalized guidance based on your income, deductions and long-term financial goals.
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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