Side hustle taxes confuse beginners because, unlike a salary, nobody withholds tax for you, yet the income is still taxable in the year you earn it.

In the United States, self-employment income is generally reported on a tax return, and you may owe both income tax and self-employment tax on your net profit.

The two habits that prevent tax surprises are tracking income and expenses from day one, and setting aside a percentage of every payment for tax.

Keep records of business expenses such as software, supplies, mileage and a portion of phone or internet costs, because legitimate deductions lower your taxable profit.