Checklist #27 · Income
Side Hustle Financial Setup
Cover income tracking, quarterly taxes, expense deductions, and legal basics to run your side business properly — and keep more of what you earn.
20 action items~20 min to complete4 sections
0%
0/25
completed
completed
Overall progress0 of 25 items
🏗️
Business Structure & Accounts
0/5 completed
Open a dedicated business checking accountKey
Get a separate business debit or credit cardAction
Decide if you need a business license or DBA registration
Consider forming an LLC once income exceeds ~$40K/yearWatch out
Get an EIN (Employer Identification Number) from the IRS — freeAction
🧾
Tax Obligations
0/11 completed
Understand quarterly estimated tax payments (due Jan, Apr, Jun, Sep)Key
Set aside 25–30% of every payment received for taxesWatch out
Track all business income — every invoice, payment, cash transactionAction
Learn which expenses are deductible as business expensesKey
File Schedule C with your personal return to report business income/loss
Consider a SEP-IRA or Solo 401(k) to reduce taxable incomeKey
Determine whether the windfall is taxable (bonuses, settlements, gambling) or tax-free (life insurance, Roth distributions)Key
For inherited assets, understand the step-up in basis rulesKey
Set aside taxes immediately if the windfall is taxable incomeAction
Consider a Roth conversion if the windfall provides a one-time opportunity with lower tax impactAction
Understand estimated tax payment obligations and payment deadlinesWatch out
📊
Deductible Expenses to Track
0/5 completed
Log home office deduction if you have a dedicated workspace
Track business mileage with a log or app (MileIQ, TripLog)Action
Capture all software, subscriptions, and tools used for business
Document professional development: courses, books, conferences
Record marketing and advertising costs
📈
Financial Sustainability
0/4 completed
Set a monthly income target and track actual vs. goalKey
Price your services using cost-plus or value-based pricing — not gut feelAction
Build a 3-month operating reserve for your side business
Review your side hustle's profitability quarterly — not annuallyKey