Side Hustle Taxes Made Simple: A Beginner’s Guide to Business Finances for Women

Money Talks

Side Hustle Taxes Made Simple: A Beginner’s Guide to Business Finances for Women

This Week’s Guest

Audrey Blackburn

President and Chief Financial Officer at Blackburn Consulting, Accounting and Tax

Starting a side hustle isn’t just about earning extra income; it’s about building good financial habits from the beginning. Separating your business and personal finances, tracking income and expenses, saving for taxes, and understanding your legal and tax responsibilities can help you avoid costly mistakes and set your business up for long-term success.

In This Guide You’ll Learn

Why every side hustle should have separate business finances
How to stay organized without complicated accounting software
How much to save for taxes
Whether you need an LLC
Common tax mistakes new business owners make
When it’s time to ask for professional help

Starting a side hustle is exciting. Whether you’re selling handmade products, freelancing after work, consulting, creating content, walking dogs, or finally turning a hobby into a business, earning extra income can open doors to new opportunities.

But once money starts coming in, your focus needs to shift from simply making sales to managing your business well.

Many women launch a side hustle because they’re passionate about what they do—not because they love bookkeeping or tax law. The good news is you don’t need to become an accountant overnight. A few simple habits can make tax season dramatically easier and help you build a stronger business from the very beginning.

Treat Your Side Hustle Like a Real Business

One of the biggest mistakes new business owners make has nothing to do with taxes.

It’s assuming they’re “too small” to worry about business finances yet.

It’s easy to tell yourself you’ll open a business account later, organize receipts later, or figure out taxes when your business grows. But successful businesses are rarely built by waiting until things become complicated.

Whether your first month brings in $200 or $20,000, treating your business professionally helps you understand how it’s performing and gives you the financial foundation to grow confidently. Good habits are much easier to build at the beginning than they are to fix after years of disorganized records.

Remember, every successful business started as someone’s side hustle.

Separate Your Business and Personal Finances

If you only make one financial change today, make it this one: open a separate business checking account.

Keeping your business income and expenses separate from your personal finances makes bookkeeping easier, simplifies tax preparation, and gives you a much clearer picture of whether your business is actually making money.

When every purchase, from groceries to software subscriptions, is mixed together in one account, it becomes much harder to identify business expenses and understand your cash flow. A separate account also creates cleaner financial records if you ever need a business loan, apply for grants, or work with a tax professional.

Your business deserves its own financial life.

Track Your Income and Expenses Throughout the Year

One of the biggest misconceptions about taxes is that you’ll receive paperwork showing everything you earned.

Sometimes you will.

Sometimes you won’t.

Regardless of whether you receive a 1099 or another tax form, you’re generally responsible for reporting all taxable business income. That includes payments received through online platforms, payment apps, checks, cash, or direct deposits.

The same is true for expenses. Advertising, software subscriptions, office supplies, business mileage, professional memberships, and other ordinary business costs may all become important at tax time.

The easiest approach is to record income and expenses consistently throughout the year instead of trying to reconstruct everything in March.

You Don’t Need Fancy Accounting Software

Many new business owners assume they need expensive bookkeeping software before they can start a business.

In reality, the best system is the one you’ll actually use.

For many side hustles, a well-organized spreadsheet is more than enough to get started. Create one section for income and another for expenses, then organize expenses into broad categories that make sense for your business.

As your business grows, you can always transition to software like QuickBooks or another bookkeeping platform. What’s most important isn’t the software—it’s building the habit of keeping accurate records.

Save for Taxes Before Tax Season Arrives

One of the biggest adjustments when becoming self-employed is realizing that taxes are no longer automatically withheld from your income.

That responsibility now belongs to you.

A common recommendation is to set aside approximately 30% of your business income until you understand your individual tax situation. That money can help cover both federal income taxes and self-employment taxes, preventing an unexpected bill when tax season arrives.

One simple strategy is opening a separate savings account specifically for taxes. Each time your business receives payment, transfer a percentage into that account. By the time taxes are due, you’ve already done the hard part.

Planning throughout the year is almost always less stressful than scrambling in April.

Do You Need an LLC?

This is one of the most common questions new entrepreneurs ask.

The answer depends on your business, your state, and your goals.

An LLC, or Limited Liability Company, is a legal structure—not a tax strategy. Many people believe creating an LLC automatically changes how they’re taxed, but that’s not necessarily the case. For many single-owner businesses, the IRS continues treating the business as a sole proprietorship unless additional tax elections are made.

While an LLC may offer legal protections and additional credibility, it doesn’t eliminate the need for good bookkeeping, tax planning, or business records.

If you’re unsure whether forming an LLC makes sense for your situation, it’s worth speaking with both a business attorney and a tax professional before making the decision.

Don’t Miss Legitimate Business Deductions

Many new entrepreneurs accidentally pay more taxes than necessary simply because they don’t realize what qualifies as a business expense.

Depending on your business, deductible expenses may include business mileage, marketing, software subscriptions, office supplies, continuing education, professional memberships, insurance, and home office expenses if you meet IRS requirements.

Rather than trying to remember expenses months later, keep receipts and maintain organized records throughout the year. Good documentation not only makes tax preparation easier but also gives you confidence if questions ever arise.

Price Your Business for Long-Term Success

Many women have no problem working hard.

Charging appropriately is often the harder part.

It’s common to see new business owners price their products or services based on what feels comfortable rather than what reflects the value they provide. Unfortunately, underpricing can make it difficult to grow, reinvest in the business, or even pay yourself fairly.

As your experience grows, your pricing should evolve too.

A sustainable business isn’t built by being the cheapest option—it’s built by delivering value and charging accordingly.

Build Your Professional Team Before You Need One

One of the smartest investments you can make isn’t software or equipment—it’s relationships.

Waiting until tax season to find an accountant often means you’re reacting instead of planning. Meeting with a tax professional during the year gives you an opportunity to ask questions, estimate taxes, understand deductions, and make informed decisions before deadlines arrive.

You don’t have to figure everything out on your own.

Building your financial team early gives you trusted people to call as your business grows.

Common Side Hustle Mistakes

Many first-time business owners run into similar challenges. The good news is they’re usually preventable.

Some of the most common mistakes include:

Mixing personal and business finances.
Forgetting to save for taxes.
Waiting until tax season to organize records.
Underpricing products or services.
Not tracking income received through payment apps or cash.
Assuming a small business doesn’t need bookkeeping.

Small habits today often prevent much bigger problems later.

Side Hustle Financial Checklist

Before You Launch

Open a separate business bank account

Create a simple income and expense tracker

Start saving for taxes

Keep receipts and mileage records

Learn your basic tax responsibilities

As Your Business Grows

Meet with a tax professional each year

Review whether an LLC still fits your business

Evaluate bookkeeping software if needed

Review your pricing regularly

Plan for estimated tax payments if required

Key Takeaways

If you remember only a few things from this guide, let them be these:

Treat your side hustle like a business from the very beginning—even if it’s small today.
Separate business and personal finances to make bookkeeping, taxes, and business decisions much easier.
Saving for taxes throughout the year helps prevent unnecessary financial stress later.
Building good financial systems early gives your business room to grow with confidence.

Frequently Asked Questions

Do I need an LLC to start a side hustle?

No. Many people begin as sole proprietors. An LLC may provide legal protections, but whether it’s appropriate depends on your individual business and circumstances.

How much should I save for taxes?

Many business owners begin by setting aside around 30% of business income until they understand their specific tax situation.

Do I have to report income if I don’t receive a 1099?

Generally, yes. Taxable business income is typically reportable whether or not you receive an information return.

Can I deduct my home office?

Possibly. The IRS has specific requirements for claiming a home office deduction, including regular and exclusive business use.

Do I need accounting software?

Not necessarily. Many successful side hustles begin with a simple spreadsheet before moving to bookkeeping software as the business grows.

When should I hire an accountant?

The best time is before you think you need one. Meeting with a tax professional during the year allows you to plan ahead rather than simply react during tax season.

Continue Learning

If you’re building a business, you may also enjoy:

Build Your Financial Team

Starting a business doesn’t mean you have to navigate every financial decision alone.

Whether you’re launching a side hustle, growing your business, or preparing for the next stage, the right professionals can help you build a stronger financial foundation.

Browse the Purse Strings Directory to connect with vetted accountants, financial advisors, attorneys, and other professionals who understand the unique financial needs of women business owners.

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Living Abroad? What Americans Need to Know About Taxes, Digital Nomad Rules, and Cross-Border Financial Planning

Money Talks

Living Abroad? What Americans Need to Know About Taxes, Digital Nomad Rules, and Cross-Border Financial Planning

This Week’s Guest

Otto Rivera, CFP®, EA

Cross-Border Financial Planner at Mindful Wealth LLC

otto@mindfulwealthco.com

More Americans are living abroad than ever before.

Some are retiring overseas. Others are embracing the digital nomad lifestyle, following a partner’s career, reconnecting with family roots, or simply looking for a different pace of life.

But moving abroad is more than a lifestyle decision.

It’s a financial decision.

And one of the biggest surprises for many Americans is that leaving the United States does not necessarily mean leaving the U.S. tax system behind.

At Purse Strings, we believe women deserve to understand the financial side of life’s biggest transitions. If you’re considering living, working, or retiring abroad, here are some of the most important financial planning considerations to understand before you go.

The Tax Surprise Most Americans Don’t Expect

Most countries tax people based on where they live.

The United States is different.

In fact, the United States and Eritrea are the only two countries in the world that generally tax based on citizenship rather than residency.

That means U.S. citizens and many Green Card holders may still have U.S. tax filing obligations even while living and working overseas.

For some Americans, this means managing two tax systems at the same time.

Understanding that reality before moving abroad can prevent expensive surprises later.

Taxes are only one piece of an international move. If you’re still building the overall plan, start with our financial checklist for moving abroad, including healthcare, banking, Social Security, housing, visas and exchange rates.

Tourist, Digital Nomad, or Tax Resident? The Difference Matters

A common misconception is that working remotely from another country automatically falls under tourism.

It often doesn’t.

Many countries distinguish between tourism and economic activity.

You may be visiting on a tourist visa, but if you’re earning income while physically present in that country, local tax rules may still apply.

This is particularly important for remote workers and digital nomads.

Before accepting a remote work arrangement overseas, it is worth understanding how the destination country views foreign workers and whether special visa or tax rules apply.

Why the 183-Day Rule Matters

Many countries use some version of the 183-day rule when determining tax residency.

While rules vary by country, spending more than approximately six months in one location may trigger tax residency status.

Once that happens, you may become subject to local tax laws even if you still consider the United States your primary home.

This is why tracking travel dates becomes more important than many people realize.

A few extra weeks in a country could potentially change your reporting requirements or tax obligations.

How Americans Avoid Double Taxation

The good news is that there are tools designed to help prevent Americans from paying taxes twice on the same income.

Two of the most common are the Foreign Earned Income Exclusion (FEIE) and the Foreign Tax Credit (FTC).

The Foreign Earned Income Exclusion allows qualifying individuals to exclude a portion of foreign-earned income from U.S. taxation if certain requirements are met.

The Foreign Tax Credit may allow taxpayers to receive credit for taxes paid to another country.

The right strategy depends heavily on your income level, residency status, and the country involved.

This is one reason why working with a financial professional who understands cross-border planning can be invaluable.

FBAR and FATCA: The Reporting Rules Many Expats Miss

One of the most common mistakes Americans make when living abroad involves foreign bank accounts.

If the combined balance of your foreign financial accounts exceeds $10,000 at any point during the year, you may be required to file an FBAR (Foreign Bank Account Report).

This requirement often surprises people because it applies to ordinary checking and savings accounts, not just investment accounts.

In addition, FATCA (Foreign Account Tax Compliance Act) rules may require reporting certain foreign assets once specific thresholds are reached.

These reporting requirements are separate from your tax return and can carry significant penalties if ignored.

Can You Collect Social Security While Living Abroad?

One of the most common questions among retirees is whether Social Security benefits stop if you move overseas.

In many situations, Americans can continue receiving Social Security benefits while living abroad.

However, eligibility and payment rules can vary depending on citizenship, residency, and the country involved.

If retirement abroad is part of your future plans, it is worth reviewing these rules before making a permanent move.

Should You Consider Dual Citizenship?

For some people, dual citizenship creates greater flexibility and opportunities.

It can simplify travel, residency rights, healthcare access, and employment opportunities in certain countries.

However, citizenship decisions should never be made solely for tax reasons.

They can affect inheritance planning, estate planning, access to government benefits, and long-term financial strategies.

Why Finding the Right Advisor Matters

Cross-border planning sits at the intersection of taxes, investments, retirement planning, estate planning, and international law.

Unfortunately, many financial professionals only work within one country’s system.

Before making a major move, consider working with professionals experienced in:

Cross-border tax planning
Expat financial planning
International retirement planning
Estate planning across jurisdictions
U.S. expat compliance

Having the right team can save both money and stress.

Frequently Asked Questions

Do Americans still pay taxes if they live abroad?

In many cases, yes. U.S. citizens generally remain subject to U.S. tax filing requirements regardless of where they live.

What is the 183-day rule?

Many countries use a version of the 183-day rule to determine tax residency. Spending enough time in a country may trigger local tax obligations.

What is FBAR?

FBAR is a reporting requirement for certain foreign financial accounts. Filing may be required when combined foreign account balances exceed $10,000 during the year.

What is the difference between FEIE and the Foreign Tax Credit?

The Foreign Earned Income Exclusion excludes qualifying foreign-earned income from U.S. taxation, while the Foreign Tax Credit may offset taxes already paid to another country.

Can I receive Social Security while living abroad?

Many Americans can continue receiving Social Security benefits overseas, although rules vary based on individual circumstances and country of residence.

The Bottom Line

Living abroad can be an incredible opportunity.

But successful international living requires more than choosing a destination.

Understanding tax residency, reporting requirements, retirement considerations, banking rules, and cross-border financial planning can help you avoid costly mistakes and build a life that works both financially and personally.

What Is It Really Like to Move Abroad?

Hear Cepee’s experience with starting over abroad and what women should consider before making the leap.Moving Abroad Financial ChecklistWhat to know about visas, budgeting, healthcare, banking, Social Security, housing and exchange rates before you go. Click here to learn more.U.S. Taxes When Living AbroadHere’s a deeper look at U.S. taxes, Foreign Tax Credits, FEIE, FBAR, FATCA and cross-border financial planning.

Grab The American’s Financial Checklist for Moving Abroad from Mindful Wealth Planning

At Purse Strings, we believe women deserve financial guidance that reflects real life—including international careers, retirement abroad, digital nomad lifestyles, and global families.

Because wherever life takes you, your financial plan should be ready to go there too.

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Q4 Money Moves: How to Max Out Retirement Accounts and Lower Taxes Before December 31

Money Talks

Q4 Money Moves: How to Max Out Retirement Accounts and Lower Taxes Before December 31

This Weeks Guest

Koren Vining

Financial Planner | Wealth Advisor

koren.vining@ceterainvestors.com

Financial literacy is one of the most powerful tools women can have. Understanding how to plan, save, and make informed financial decisions can help create greater confidence and control—especially as more women take the lead in managing household and personal finances.

In a recent Money Talks session, Dr. Barb hosted Corrine Vining, a Certified Financial Planner with Satera Investors, to share educational insights about year-end planning, tax awareness, and preparing for a financially strong new year.

This conversation was designed to inform and empower—not to provide individualized advice.

Why Financial Literacy Matters

At Purse Strings, we believe that financial education is key to empowerment. Our mission is to connect women with trustworthy information and vetted financial professionals who can help guide them through key life and money decisions.

Financial literacy is not about perfection or wealth—it’s about making informed choices, understanding your options, and gaining confidence in how you manage your money.

Educational Takeaways from the Session

Certified Financial Planner Corrine Vining offered several general educational tips for women to consider before the end of the year. These are not personal recommendations, but rather topics you may want to review with a qualified financial professional.

1. Review Retirement Accounts Before Year-End

If you have an employer-sponsored retirement plan such as a 401(k) or Roth 401(k), it may be a good time to review your contributions. Some individuals choose to increase contributions or confirm that they are on track to maximize annual limits.

Additionally, you may want to speak with a financial or tax professional about whether Roth conversions could fit into your broader financial plan. These strategies have tax implications and should be discussed carefully with a qualified professional.

2. Understand Roth Conversions

A Roth conversion involves moving funds from a traditional retirement account into a Roth account. Doing so can result in current tax obligations but may allow for tax-free withdrawals in the future, depending on IRS rules.

Whether this strategy makes sense depends on your income, goals, and tax situation—so professional guidance is essential.

3. Review Health Savings and Flexible Spending Accounts

If you have a Health Savings Account (HSA) or Flexible Spending Account (FSA), review contribution limits and deadlines before December 31.

HSAs may offer long-term savings and certain tax advantages under current law.
FSAs generally must be used within the plan year, so consider eligible medical expenses before funds expire.

Your benefits provider or HR department can confirm specific rules for your plan.

4. Conduct a Personal Financial Review

The end of the year can be a great time to review your financial situation. Consider:

Reviewing bank and investment accounts.
Updating or canceling unused subscriptions.
Reviewing your credit report for accuracy.
Being alert to scams, particularly during the holiday season.

These small steps can help increase awareness and confidence going into the new year.

5. Support and Protect Older Adults

Financial scams targeting seniors are unfortunately on the rise. Corrine encouraged participants to review ways to protect aging family members, such as adding trusted contacts to accounts or setting up account alerts to monitor unusual activity.

If you’re concerned about an older relative’s financial safety, consider speaking with a financial professional or legal advisor familiar with elder care planning.

A Closing Note on Financial Empowerment

Financial literacy is not about having all the answers—it’s about asking better questions and knowing where to turn for help.

Dr. Barb and Corrine emphasized that proactive planning, education, and open conversations are the foundation of financial confidence. Whether you’re reviewing retirement options, managing taxes, or helping loved ones stay secure, informed decision-making is key.

Next Steps

Review your year-end checklist with your financial or tax professional.
Revisit contributions to savings, retirement, and health accounts.
Consider scheduling a personal financial review before year-end.

If you’d like to continue learning, visit pursestrings.co to explore free resources and connect with vetted financial professionals who specialize in serving women.

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Planning for Life’s Transitions: Retirement, Tax Strategies, and Wealth Protection

Money Talks

Planning for Life’s Transitions: Retirement, Tax Strategies, and Wealth Protection

This Weeks Guest

Eric Blake, CFP®

Founder and Lead Financial Planner

eric@blakewealthmanagement.com

Life doesn’t happen in straight lines—and your finances shouldn’t either.

Career changes, retirement, divorce, or loss can all upend even the best-laid plans. That’s why financial planning isn’t just about managing investments—it’s about creating a strategy that evolves with you.

In this Money Talks session, Eric Blake, Certified Financial Planner at Blake Wealth Management, broke down how women can plan proactively for life’s transitions—especially when it comes to taxes, protection, and long-term stability.

Why Planning Ahead Matters

Financial planning isn’t a once-a-year task—it’s a lifetime process. Eric reminded us that many of the smartest financial moves have deadlines. Once the year closes, your options often disappear.

That’s why proactive planning is key, especially around major transitions like marriage, divorce, retirement, or the loss of a spouse. These events can dramatically change your tax picture, and early strategy can mean the difference between financial stability and unnecessary stress.

A strong plan looks forward—anticipating shifts in income, expenses, and tax status before they happen.

Tax Strategy: The Hidden Power Tool

Every financial decision has a tax consequence, and timing is everything.

Eric walked us through how smart, proactive tax planning can:

Reduce taxable income over time
Manage Medicare premiums more efficiently
Prevent the “widow’s penalty”—when a surviving spouse pays higher taxes on less income
Create opportunities for long-term tax savings through Roth conversions or strategic contributions

These aren’t “nice to haves”—they’re moves that can save thousands over a lifetime. Tax planning isn’t just about minimizing what you owe today; it’s about maximizing flexibility and control for the future.

Protection Planning: Your Financial Safety Net

A well-built financial plan doesn’t just grow—it protects.

Eric emphasized the importance of life insurance, disability insurance, and long-term care coverage as foundational pieces of any plan. They safeguard your family and ensure your goals don’t collapse when life takes an unexpected turn.

He shared the story of Sue, a client who reviewed her policies and updated beneficiaries before her husband passed away. When the unthinkable happened, her preparation allowed her to navigate emotionally and financially with far less chaos.

The lesson? Review your protection plan regularly. Confirm beneficiaries, assess coverage, and make sure the details match your life today—not five years ago.

Strategic Planning: Saving Now to Thrive Later

A truly effective financial plan works in layers. Eric explained how yearly reviews help women anticipate future tax brackets, plan contributions, and make well-timed moves like Roth conversions or charitable distributions.

“Small decisions made now,” he said, “can save you thousands later.”

The goal is long-term tax efficiency—so that more of your money stays yours, working toward your goals instead of disappearing to taxes or fees.

Why Women Need to Lead Their Own Planning

Here’s the hard truth: 80% of women will outlive their partners.

That means most of us will manage our finances alone at some point. Waiting until later isn’t an option.

Understanding your financial picture now—your accounts, your insurance, your taxes—isn’t just about preparedness. It’s about power. It’s what turns uncertainty into confidence.

The Takeaway: Plan with Purpose

Financial planning isn’t about perfection—it’s about progress and preparation.

Eric Blake’s message was clear: when you take control early, you create more options, avoid preventable mistakes, and reduce stress when life inevitably changes.

At Purse Strings, we’re here to make that easier. We connect women with vetted financial professionals—like Eric—who understand how life transitions impact women differently, and who know how to plan strategically through every stage.

Because when women plan ahead, they don’t just protect what they have—they build what’s next.

Grab Eric’s Tax and Retirement Planning Cheat Sheet

👉 Find your trusted financial pro through the Purse Strings Approved Network and take your next step toward confidence and clarity: pursestrings.co

And join us for next week’s Money Talks on Planning for Holiday Spending Without the Stress—a practical guide to finishing the year financially strong.

Content here is for illustrative purposes and general information only. It is not legal, tax, or individualized financial advice; nor is it a recommendation to buy, sell, or hold any specific security, or engage in any specific trading strategy. All investing involves risk including loss of principal. Results will vary. Past performance is no indication of future results or success. Market conditions change continuously.

This commentary reflects the personal opinions, viewpoints, and analyses of Blake Wealth Management. It does not necessarily represent those of RFG Advisory, their clients, or their employees. This commentary should not be regarded as a description of advisory services provided by Blake Wealth Management or RFG Advisory, or performance returns of any client. The views reflected in the commentary are subject to change at any time without notice.

Advisory services offered by Investment Advisory Representatives of RFG Advisory, LLC (“RFG Advisory” or “RFG”) a registered investment advisor. Blake Wealth Management and RFG Advisory are unaffiliated entities. Advisory services are only offered to clients or prospective clients where RFG Advisory and its representatives are properly licensed or exempt from licensure. No advisory services may be rendered by RFG Advisory unless a client agreement is in place.

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