Rising costs mean Americans are looking for ways to boost their income. And for 44% of Americans, this means taking on a side hustle to bring in some extra funds. The average side hustle will bring in around $473 a month$5,700 a yearfrom jobs including reselling items on sites like Amazon or eBay, day trading, tutoring or online freelancing. However, other side hustles are in high demand and can bring in four or five times that amount.
A recent study by Freelancer.com that analyzed data from 372,000 jobs posted on the platform between October 1 and December 31, 2022 and ranked programming-, report writing-, and research-related jobs among the fastest growing skills on the platform.
We have employers turning to freelancers for content jobs, such as writing and research projects, all the way to highly complex jobs like mathematics, programming and engineering. The trend that we continue to see is the surge in tech-related projects as a result of global tech layoffs, said Matt Barrie, Chief Executive at Freelancer.com in a statement.
5 side hustles with the potential to pay over $20,000 extra each year
If youre on the hunt for a new side gig that you can do from home, freelancing platform Upwork compiled a list of some of the most popular freelancing jobs on its site. According to Upwork, the following can earn you at least $20,000 a year for 15 hours of work per week.
Lets say you earn $30 an hour as a writer, work 15 hours a week, and work 48 out of 52 weeks in a year (to account for four weeks holidays and vacation). That would mean youd work 720 hours total in a year and would make around $21,600 total before taxes ($30 x 720).
Experts say that if youre already using these kinds of skills at your 9-to-5, it may be worth exploring side jobs that allow you to flex those muscles even more.
Many companies do not have the budget to hire a full-time employee but could use your help a few hours each week, says Emily Casey Rassam, Senior Financial Planner at Archer Investment Management. Consider a second job utilizing your expertise and experience from your primary career. Reach out to target companies and offer your time and services. They might not have listed a position, not knowing you exist.
What to consider before taking on a side hustle
There are several factors to consider before you choose a side hustleapart from potential earnings. Even if youre only working a few extra hours a week, you dont want to find yourself in a position that leads to burnout or causes unnecessary stress.
Your hobbies, passions, and existing skill set can work to your benefit
You can use your side hustle to explore a passion or hobby that doesnt have to do with your day job, but if nothing piques your interest, you can also use some of the skills you use at your regular job to make extra money on the side. This could also be an opportunity to build up your resume with experiences from outside companies.
Time management is key, so choose a side hustle that wont lead to burnout
Your side hustle will inevitably eat into your free time, so aim to set a designated time for side hustle work and time to rest and recharge. I would suggest this side hustle be done in the evenings or on weekends, says Dawn Dahlby, a certified financial planner and wealth wellness expert. "Remove your social media scroll and you would have lots of time to engage in something you are passionate about.
You should loop your employer into your plan
If you're looking to start working on the side, you might need to let your employer know if it might be considered problematic.
For example, if youre producing similar work to what you normally do at your job, your employer may or may not have an issue with it. Review your employee handbook to see if your company has outlined any specific rules or limitations related to outside work. Typically, its best to err on the side of caution and let them know in advance if possible.
Integrity and honesty is a must. Discuss with your employer the side hustle and that you have boundaries set between both responsibilities, says Dahlby.
Consider the tax implications for that extra income you earn
Side hustle earnings are taxable income, so you should keep a record of your earnings and hang onto any tax documents you receive from the jobs you complete. If you earned $600 or more in income, the company you worked for will need to provide you with a 1099-form. If you earned less than $600, the company isnt required to send you a form, but you are still required to report that income on your taxes.
If you have a secondary source of income, consider increasing your tax withholdings from your primary paycheck, says Rassam. The IRS has an excellent paycheck withholding calculator that might help you dial in the correct number so that you don't owe a significant tax bill in April.
The takeaway
Side hustles can be a great way to take a breather from the tasks you work on at your day job and explore other talents. It can also be an opportunity to continue to strengthen the skills you already have. If youre considering a side hustle, think carefully about how to balance the added work with your day job and make sure to keep your employer and the IRS in the know to avoid any surprises.
