How Today’s Side Hustles Make DIY Taxes Riskier Than Ever

Side hustles aren’t a trend anymore — they’re part of everyday life.

From freelance work and consulting to online sales, delivery apps, rental income, and content creation, more Rochester and Greece residents are earning income outside of a traditional paycheck than ever before. While this extra income can be a great financial boost, it also adds complexity that many DIY tax filers underestimate.

In today’s financial landscape, side hustles have quietly turned many “simple” tax returns into something far more complicated — and riskier — when handled without professional guidance.

Side Hustles Change the Nature of Your Tax Return

For years, many people could confidently file their own taxes using basic software. A W-2, a standard deduction, and little else. Side income changes that equation.

Once you earn money outside a traditional employer, you may now be responsible for:

• Reporting self-employment income
• Tracking deductible expenses
• Understanding estimated tax payments
• Managing self-employment taxes

Tax software can help you enter numbers — but it doesn’t evaluate whether you’re handling those responsibilities correctly.

Many Side Hustlers Don’t Realize What Counts as Taxable Income

One of the most common issues we see is unintentional underreporting. Many people assume income is only taxable if they receive a specific form or cross a certain dollar threshold.

In reality, taxable side-hustle income can include:

• Freelance or contract work
• Online sales and marketplace earnings
• Gig economy income (delivery, rideshare, task-based work)
• Rental or short-term rental income
• Digital products or services

DIY software relies entirely on what you disclose. If income is overlooked — even unintentionally — the return may be inaccurate.

Expense Deductions Are Easy to Get Wrong

One of the biggest appeals of having a side hustle is the ability to deduct related expenses. But this is also one of the riskiest areas for DIY filers.

Questions around deductions often include:

• What expenses are truly deductible?
• How should shared personal and business expenses be handled?
• What documentation is required?
• How aggressive is too aggressive?

Tax software doesn’t warn you if a deduction looks questionable. It simply accepts what’s entered. A professional review helps ensure deductions are appropriate, defensible, and properly documented.

Self-Employment Taxes Catch Many People Off Guard

Side hustle income often comes without taxes withheld. This means many Rochester residents are surprised by their tax liability when filing season arrives.

Self-employment taxes can significantly increase what’s owed, especially for first-time side hustlers. Without planning ahead, this can lead to:

• Unexpected balances due
• Cash flow stress
• Difficulty budgeting for future years

Professional guidance helps households understand these obligations early — not after the return is filed.

Estimated Taxes Are Commonly Missed

Another major risk area is estimated tax payments. Many side hustlers are required to make quarterly payments but don’t realize it until penalties appear.

DIY software doesn’t proactively guide filers through estimated tax requirements for the upcoming year. A CPA, however, looks ahead and helps ensure clients stay compliant moving forward.

Side Hustles Often Overlap With Personal Finances

Many people run side hustles casually — using personal bank accounts, credit cards, and mixed-use expenses. This overlap makes recordkeeping more complicated and increases the chance of errors.

Keeping personal and business finances separate is critical, but it’s something many DIY filers don’t address until problems arise.

This is where professional support tied to business services becomes especially valuable, even for small or part-time ventures.

Tax Software Focuses on Filing — Not Planning

DIY platforms are built to file a return, not to help you think strategically.

A CPA looks beyond the current year and considers:

• How side income affects future tax liability
• Whether adjustments should be made to withholding
• How income timing may impact next year
• What changes could reduce risk going forward

This kind of forward-looking insight is especially important as side hustles grow or become more consistent.

The IRS Is Paying More Attention to Side Income

As side hustles become more common, reporting requirements and enforcement have increased. More third-party reporting means fewer income streams go unnoticed.

Filing incorrectly — even unintentionally — carries more risk today than it did years ago. Professional preparation reduces that risk by ensuring returns are accurate and complete.

When DIY Might Work — And When It Usually Doesn’t

DIY filing may still work for individuals with truly minimal side income and no complexity. However, once income grows, expenses increase, or circumstances change, professional support often becomes the smarter choice.

The more moving parts involved, the higher the stakes.

Why Local Expertise Matters

Working with a local CPA means working with someone who understands not just tax rules, but real-life situations facing Rochester and Greece residents.

At Nacca & Capizzi, we help individuals and families understand how side income fits into the bigger picture — not just how to file, but how to move forward confidently.

Whether your side hustle is brand new or growing steadily, guidance through tax services can help you avoid costly mistakes and unnecessary stress.

Side Hustles Are an Opportunity — If Handled Correctly

Earning extra income can open doors and create flexibility, but only when it’s managed properly. As side hustles continue to grow in popularity, relying solely on DIY tax tools becomes riskier.

Just because filing software exists doesn’t mean it’s the best solution for every situation.

If you have questions about how side income affects your taxes or want guidance tailored to your situation, working with a professional can make all the difference.

Get Professional Guidance

If you’re navigating side income and want clarity, support, and confidence, our team is here to help.
Contact Nacca & Capizzi to start the conversation.

Disclaimer: This article is for informational purposes only and should not be considered tax, financial, or legal advice. Every individual’s situation is unique. Always consult a qualified professional regarding your specific circumstances.