Having a money-making scheme on the side can be great for giving you an extra income boost. However, you should be careful of certain side hustle mistakes that could cost you money or even get you into legal trouble. Here are just five side hustle slip-ups to avoid at all costs.
Forgetting to pay your taxes
If you’re earning a lot of money from your side hustle, it’s possible that this money may be taxable. Failing to pay your taxes on this income could get you into legal trouble. If you already own a full-time business on top of your side hustle, you may already have a clear idea of how bookkeeping works – if not you may have to educate yourself. Hiring an accountant could be an option, but in the case of most side hustles it probably isn’t worthwhile. Instead, consider downloading some free accounting software from the likes of ZipBooks. Remember that even if your side hustle income isn’t taxable, you must still make it known to the taxman by filing a tax self-assessment each year.
Ignoring other legal business requirements
There are a number of other legal requirements that your side hustle may have to abide by. It’s worth looking into these compliance rules to ensure that you’re not doing anything illegal. The likes of Jumio’s regulatory compliance solutions can help you when it comes to aspects such as data protection. You could also consider hiring a solicitor to help fill you in on the legal requirements.
Investing too much time into your side hustle
A side hustle should be something that can fit into your spare time without you straining yourself. If your side hustle is causing you to lose sleep or you’re sacrificing a lot of time with family and friends to make it work, consider whether this side hustle is really worth your while. It could well be a something that you’re passionate about, in which case you may not mind investing all your free time into it, but it shouldn’t become a time-consuming chore.
Investing too much money into your side hustle
Similarly, you should be careful of investing too much money into your side hustle. For example, if you make cakes on the side, consider whether you really need all the most expensive equipment – you could end up spending more on this side hustle that the money you’re getting out of it. Try to keep a lid on your expenses and focus on maximising profit.
Prioritising your side hustle over your main job
Be wary of letting your side hustle get in the way of your main job. Whilst your side hustle may be something you enjoy more, it’s your main job that pays the bills. Only prioritise your side hustle if you feel you could turn it into a full-time business that earns you more than your current day job – in this case, it’s no longer a side hustle but a successful business which you deserve to pour all your energy into.