The story below is from our November/December 2024 issue. For more stories like it, Subscribe Today. Thank you!
Create additional income this holiday season with these helpful tips.
Although the stock market has continued to rally in 2024, a significant portion of the American population is grappling with the challenge of saving money. The upcoming 2024 presidential election has engendered economic pressure and uncertainty. Particularly, inflation is highlighted as the primary financial concern, closely followed by housing expenses, the potential for a recession, healthcare costs, interest rates, taxes, overall saving capacity, debt (including student loans), job security and salaries.
Many individuals are seeking strategies to curtail costs and bolster their overall savings, particularly in preparation for the upcoming holiday season. Listed below are some creative ideas to boost your income and alleviate the financial stress of the holiday.
Freelancing: Utilize Your Skills
During the holidays, it is common for many professionals to seek additional sources of income through freelancing. It is a popular side hustle that presents the opportunity to utilize your skills effectively. Freelance graphic designers, writers, editors and website developers are all in high demand. Working on a project-by-project basis, freelancers can manage their workload efficiently while earning extra income. This tried-and-true method is particularly valuable during the holidays when financial demands may be higher.
Selling Homemade Artisan Crafts and Goods
If you enjoy getting crafty and letting your creativity flow, why not transform your passion into a successful business? Create handmade artisan crafts and goods to sell at local markets, craft fairs or popular online platforms such as eBay and Etsy. Handcrafted jewelry, candles, soaps and decorative items are sought-after holiday gifts that can bring in a solid profit. By using your artistic side to produce one-of-a-kind items, you can earn extra income and have a more relaxed holiday season.
Gift Wrapping Services: Turn Wrapping into Profit
During the holidays, many people are pressed for time and eager to outsource tasks like gift wrapping. If you have a knack for presentation and attention to detail, consider offering gift-wrapping services for a fee. You can advertise your services on social media, community bulletin boards or through word of mouth. By providing a convenient and professional gift-wrapping service, you can earn extra money and help others check a task off their holiday to-do list.
Sell Unneeded Items
Using online platforms to sell unused and unneeded items is a fast and easy way to earn extra cash. Give yourself room for negotiation as many people can be expected to haggle when buying used products. There is a platform for every kind of reseller; however, it is important to pay attention to fees. Each website charges for listings, shipping and processing of your items.
For instance, the Facebook marketplace does not charge fees to list items for local pickup. Sellers are, however, charged 10% of the sale price for shipping, plus a 2.9% processing fee. Consider the types of products you will sell, your audience and the cost to list each item. Many websites do not charge a listing fee, but some may. It can also be helpful to look at what platforms charge to advertise your listing to reach more viewers.
Rent Out Extra Space: Monetize Your Property
If you have extra, unused space in or around your home, consider renting it out to earn extra cash. Renting out extra space can be a quite profitable side hustle. Websites like Airbnb and VRBO allow you to list your spare room, guest house or vacation property for short-term rentals. Other options to consider are renting outside spaces such as yards or patios, as this can be a great opportunity to host parties such as bridal and baby showers.
Something else to consider is renting out unused sheds or barns, as these can be used as an alternative for public storage. A detached garage or pool house can be rented, serving as a storefront or even a studio. By welcoming guests into your space, you can generate additional income to cover holiday expenses. Plus, you may even make new friends and connections along the way.
Moonlighting: Take on Part-Time Work
Retail stores, restaurants and delivery services often hire seasonal workers during the holiday season to meet increased demand. Picking up a few extra shifts or gigs outside of regular work hours is a sure way to supplement your income and bring in some extra money for holiday shopping.
Executing Your Activity
Engaging in various side activities to supplement your income is common, whether it’s a short-term gig during the festive holiday period or a regular source of additional earnings throughout the year. This means that setting up an LLC for your side income is not a mandatory step. Most people creating extra income beyond their normal jobs act as sole proprietors. However, it’s crucial to note that the income you’ve earned from these activities has not been reported to the IRS, which implies that taxes have not been withheld from it, unlike a traditional job where taxes are automatically deducted through a payroll system. As a result, companies that have paid you for these services will likely report this income on a Form 1099, distinct from the Form W-2 provided by a standard payroll department. This difference underscores the importance of understanding your tax obligations and ensuring that all sources of income are accurately reported to comply with IRS regulations.
To clarify, here is an example. Tom helped Rebecca with a few items around the house. Switching out lights and ceiling fans, putting together a few pieces of furniture, setting up her TV, cleaning the garage and taking items to the dump. This activity took him all weekend. Rebecca gave him $1,500 for his hard work and time, not to forget the amazing service he provided for her. Rebecca wrote a check to Tom for $1,500. Tom deposited this into his household joint checking account. This is acting as a sole proprietor. Again, many people creating extra income beyond their normal job act as a sole proprietor.
If Tom found five people to help and made $1,500 per household, he made $7,500 to report as income this year. He reports this income on his tax return and hasn’t accounted for this income as far as taxes are concerned. Be sure as you receive the income to set back a percentage for tax time. This percentage is based on your household tax bracket.
It is important to know how business structures differ. Some key terms are as follows:
- Sole Proprietorship – This is the most common type of business structure. You are operating in your name, as well as collecting income in your name.
- Single-Member LLC – Although not the most common, it is the most well-known structure. With this, you are operating under the LLC name, as well as earning income under the LLC name.
- Multi-Member LLC – When two or more people own and go into business together.
- Corporation – Used for full-time business activities.
While 54% of Americans are creating additional income, it is important to know how these additional revenue sources impact your tax return. Keep an eye on your total household income, as this defines your tax bracket. Having a tax accountant at hand is paramount to tax mitigation success.
These creative side hustles offer a great way to boost your income, whether you’re saving for the holidays or planning ahead for the year. With a little effort and the right strategy, you can ease financial stress and enjoy extra cash in your pocket.
The story above is from our November/December 2024 issue. For more stories like it, Subscribe Today. Thank you!