Side hustles and freelance gigs

Hey there!

I’m looking for someone with some experience in home DIY to answer a few questions for me.

I have a steady job, but I’m thinking about starting a side hustle making jewelry, souvenirs, and other keepsakes. Since I'd only be bringing in a few hundred dollars a month to start, I'd probably just open a small home-based business.
I have a question regarding the following:

Are there any business books out there that would allow me to handle my own bookkeeping and then just submit all the necessary tax and contribution forms myself? Basically, if I make a certain amount of revenue, I pay taxes and contributions based exactly on that number. Also, would I still need to file a specific quarterly tax return for this?

Can I sell my products to a local shop or souvenir boutique for them to resell? If I do that, will I need to include product declarations and barcodes on everything?

What kind of bank account are we talking about here, and can those funds only be used for this specific business venture? Also, how exactly do I go about withdrawing the profits I make?

I would be so grateful if someone with actual experience could weigh in here. I’ve reached out to several accounting firms, but they all tell me they don't take on clients with side hustles, and I’m really just looking for some reliable advice.

copperpanther14 said:Hey there!

I’m looking for someone with some experience in home DIY to answer a few questions for me.

I have a steady job, but I’m thinking about starting a side hustle making jewelry, souvenirs, and other keepsakes. Since I'd only be bringing in a few hundred dollars a month to start, I'd probably just open a small home-based business.
I have a question regarding the following:

Are there any business books out there that would allow me to handle my own bookkeeping and then just submit all the necessary tax and contribution forms myself? Basically, if I make a certain amount of revenue, I pay taxes and contributions based exactly on that number. Also, would I still need to file a specific quarterly tax return for this?

Can I sell my products to a local shop or souvenir boutique for them to resell? If I do that, will I need to include product declarations and barcodes on everything?

What kind of bank account are we talking about here, and can those funds only be used for this specific business venture? Also, how exactly do I go about withdrawing the profits I make?

I would be so grateful if someone with actual experience could weigh in here. I’ve reached out to several accounting firms, but they all tell me they don't take on clients with side hustles, and I’m really just looking for some reliable advice.

A home-based craft business can be set up as a sole proprietorship under the simplified tax regime. You wouldn't need to worry about payroll tax filings. Under this structure, you are capable of managing all your own business books.

2. Am I allowed to sell my products to a retail store or a souvenir shop for resale? If I do, would I need to include a product declaration and a barcode on those items?

Yes, you certainly can; I see no reason why you couldn't. You can draft the product descriptions yourself, and a barcode isn't strictly required—it’s really just one specific technical option available to you.

3. What kind of bank account should I open, and must the funds from that account be used exclusively for the needs of the craft business?

You would open a standard business checking account. Once the money is there, you can spend it on whatever you choose.

In that case, how do I pay myself the profit I earn?

You are free to use the money from your business account as you wish. It functions much like an owner's draw.

I would be extremely grateful if someone experienced could answer me. I have sent these inquiries to several accounting firms, but they always tell me they don't take on clients with small home crafts, and I would really like to receive verified answers.

I am not an expert in this field, but it seems quite strange that there are accounting services unable to support a small home craft business through a simplified tax system.

If they cannot handle that, one wonders what they actually specialize in.

Thanks for getting back to me.

Every time I ask around, nobody can give me a straight answer about which books I actually need to maintain. Some people just mention paying taxes based on certain flat-rate estimates, while others suggest there's an option where I submit a form at the end of the year—using my own business records—to deduct expenses from my income before calculating what I owe.

I would really love for someone to clear up how that second option works.
Also, since I already have a full-time job, how much in self-employment tax am I actually looking at? Some say zero because my W-2 job covers everything, but others talk about specific thresholds without being able to tell me how to calculate the actual math...

The IRS basically told me to go talk to an accountant. Honestly, I’d be more than happy to pay for some professional consulting or whatever you call it, provided I can find a firm that already handles small home-based businesses so they can walk me through the details.🙂

copperpanther14 said:Thanks for getting back to me.

Every time I ask around, nobody can give me a straight answer about which books I actually need to maintain. Some people just mention paying taxes based on certain flat-rate estimates, while others suggest there's an option where I submit a form at the end of the year—using my own business records—to deduct expenses from my income before calculating what I owe.

I would really love for someone to clear up how that second option works.
Also, since I already have a full-time job, how much in self-employment tax am I actually looking at? Some say zero because my W-2 job covers everything, but others talk about specific thresholds without being able to tell me how to calculate the actual math...

The IRS basically told me to go talk to an accountant. Honestly, I’d be more than happy to pay for some professional consulting or whatever you call it, provided I can find a firm that already handles small home-based businesses so they can walk me through the details.🙂

It really comes down to a matter of choice.

You can choose to keep full business books, where your total revenue minus your business expenses equals your taxable income.

Alternatively, you can opt for a simplified flat-tax structure.

Since the flat-tax route is incomparably more advantageous and involves far less paperwork, I assumed you would likely gravitate toward that path.

Also, regarding social security and Medicare taxes—how much exactly will I need to pay, considering I already have a full-time job? Some say I won't owe anything because my employer covers everything, while others mention certain thresholds, but they can't tell me exactly how to calculate my specific liability...

While your primary employer handles your main payroll taxes, these are additional contributions triggered by engaging in what is considered "secondary employment."

If you decide to keep detailed business books, your actual net profit serves as the base for these taxes; however, under the flat-tax system, the amount is determined by the specific bracket you fall into. Initially, you would likely start in the first tier.

Try reading through this...

The IRS told me I should reach out to an accountant.

That is a bit of a gray area. While they are technically obligated to assist you, they shouldn't really step in and act as your private bookkeeper, as they serve as an oversight body; doing so would create a conflict of interest.

Finding that perfect balance is quite difficult.

...well, honestly, I would gladly pay for some professional consulting or whatever it's called, just to find an accounting firm that handles small home-based businesses so they can walk me through everything in detail. 🙂

Tax consulting will run you about $100 per hour, if not more, and this is a relatively straightforward matter... You would likely just receive a formal written opinion filled with legal jargon that won't necessarily make things clearer.

Accounting firms often find it hard to justify charging you for something this simple, so they tend to avoid it; and if they haven't worked with micro-businesses before, they might not even know the answers.

It isn't particularly complicated, and I believe you are capable of handling it yourself.

Understood... I appreciate the effort and the answers you provided. 🙂

If anyone else has some home improvement tips or personal experiences they'd like to share, please feel free to post them. Everything is going to work out just fine. 🙂

copperpanther14 said:Understood... I appreciate the effort and the answers you provided. 🙂

If anyone else has some home improvement tips or personal experiences they'd like to share, please feel free to post them. Everything is going to work out just fine. 🙂

Basically, you just register your home business with the local Small Business Administration office and file for a simplified tax status.

Since you can't earn more than 10 times the average salary per year—which would be $28—you fall into the first tax bracket, meaning an annual tax of $602 if you're based in New York City (though you pay it quarterly $150).

You'll handle your payroll taxes annually since you're technically self-employed—around $744 per year.

You just issue invoices following standard IRS guidelines and keep a simple ledger of your sales.
Open a business account at your bank, and then you're free to use your money however you want.

👍

Thanks for getting back to me! :-)

Also, if anyone could lend a hand with the application section regarding the specific crafts being taught... should I be basing those details on Super Bowl XL or the official manual for craft certification guidelines?

Look, if you head over to Facebook, there’s a massive group dedicated to small business owners and freelancers. You'll definitely find answers to most of those questions you've been asking there. 😉
Before you go dumping all your questions in the feed, though—and trust me, people can be prickly—do yourself a favor and use the search bar within the group first. Check to see if someone hasn't already answered your exact problem. If it's something new, then go ahead and post it; someone will surely step up to help you out.

Following up on the author's thread, I have a few questions about buying illustrations for my social media posts. We're talking small amounts here—likely won't exceed $1,100 a year at current rates. Is there a way to handle this without officially setting up a small home business, or is that my only option? For context, I don't actually advertise any sales on these pages; I just post the artwork.