Do your Side Hustle from home!

It is truly amazing that side hustle is now a thing. After all, a few decades ago, no writer would’ve considered using “hustle” in a ad copy or an article. 

Why? Well, somehow, the word hustle became an abbreviation for something that is nasty, and was described as; “being hustled!”

Back then, for many, this word dredged-up thoughts of “being ripped off!”

I mean, with such a negative connotation, can you blame copy writers from avoiding its’ use?

Even though “hustling down to first base,” and other slang uses, meant generating lots of sales or putting in great effort, both of which are admirable, that perception made the word nearly useless.

That is, until recently.

Today, all major online media websites have posts containing side hustle in the blog title. And, for this content creator, the juxtaposition is both weird and welcomed.

Why? Because I’ve always had the Pete Rose vision of hustle. To me the word means max effort or “Charlie Hustle” and in no way should it be connected to “being ripped off.”

In case you didn’t know, maybe because you grew up after side hustle was a thing or came to the U.S. or Canada from another continent, I suggest you do a Google search on the meaning of hustle. There are respectable definitions, like being busy and active, which is inspiring, but that is not all there is.

In the same listing as the meaning above, was an optional or informal meaning—more commonly known to North Americans; “to swindle!”

Aside from my view of “hustle” being a “max effort” thing, the “weird” part is the undeserved, North American connotation, albeit of the past. After all, blogging, vlogging, e-commerce or other home businesses are common and legit.

So, can you do your side hustle from home? Yes.

Not only can you operate a part time business at home, there’s also an amazing and profound reason why you should.

Home office write offs

In the U.S. and Canada (and, likely, many more countries), the Government will ‘pay’ anyone to start a part time business — the very definition of a side hustle — that is home based.

The catch? They have to already have income when they start their side hustle. 

Now, I know the Government paying you might sound odd but it is absolutely true, though I am not using the word “pay” literally. It is not like the U.S. or Canadian Governments would advertise; “We will pay you to start a part time home based business,” or something similar to that. Not at all.

However, if you start a home business, like other businesses, you are entitled to various deductions. Unlike other businesses, some of the “write offs” applicable to side hustles, especially those that are home based, can be applied to any exiting income. 

These home office write offs or home office tax deductions, and other deductions, end up being truly brilliant, as you will see.

As long as you have income from another source that you pay taxes on (under the table doesn’t apply) or have taxes deducted from (like W2 employees in the U.S. and T4 in Canada), you can claim your home office tax deductions and other side hustle expenses from that job income.

That didn’t sound exciting, did it? Wait for it!

It’s highly likely, for any side hustle based, that at the largest expense anyone will deduct from existing job income would be fall into the home office tax deductions category. Because rent or mortgage payments are significant. 

Again, these expenses are applied against job income to reduce than employees taxable income, for expenses we all have anyway!

I mean, you are going to pay your rent or mortgage regardless of whether you have a side hustle, right?

Imagine you had rent or mortgage payments of $24,000 per year and you could say you use one-sixth of your residence for business. That would mean a $4000 tax deduction. Meaning you would not pay tax on $4000 of your day-job income.

Why? Because you paid the rent at home and opened a part time business. And, that business does not need to have made you one dime (yet)!

Of course, literally, you would pay those taxes, usually “at source” (deducted from each check) and then get them back later on. But stay with me.

Now, imagine there’s no start-up cost for your home business. That would mean that, that tax paid for whatever deductions you can apply to your taxable day-job income, would be returned to you, in the form of a tax rebate. One that goes straight back in your pocket.

So, home office write offs means that, for a change, the Government owes you  money. LOL.

Yes, you should do your side hustle from home. Because it makes dollars and sense, even before you make a cent of part time income!

Now imagine someone in the 30% tax bracket with that $4000 deduction.  Though this explanation is a tad oversimplified, they would receive a $1200 tax rebate. 

In the same scenario, if we replace 30% with 42% — obviously this is an individual with a higher income — the rebate becomes $1680. And, in the 25% tax bracket, it would be $1000.

I like to think of the home office write off as the Government renting your extra bedroom, or some other part of your house, for $1000 to $1680 a year, just because you started a side hustle.

Better still, not only is the Government sort of paying you rent, in the form of a tax rebate, you also get to use that space yourself too!

Now that you’ve getting it, but there’s more. 

You also get write offs including but not limited to part of your mobile phone, Internet connection, heat, electricity, and even home repairs!

When you add up all your write-offs, it is reasonable for that total to even be as much as $10,000. And any tax you paid on that full-time job income is now owed back to you, even before your side hustle makes you even a dime.

This is the point where I say, if that was only $5000, would you really be mad at me? I mean, 30% of this amount is $1500. A nice sum to get for simply deciding to open a part time business.

Okay, I like saving money but not as much as making it, so would it be okay to get on with what you can do to make money. What side hustle will you chose?

Remember, the home business start-up cost can be little or nothing, if chose your side hustle idea carefully. In fact, I propose you do decide to do something that comes with a start up cost of $100 or less, with less being better.

Personally, I introduce people to a free start-up option. Because the lower the entry cost the more of the tax rebate you pocket. And better that than giving it to someone else in a round about way!

If you are reading between the lines, what I am saying is; you are guaranteed to be ahead financially in the first year . . . IF you don’t lose your mind and buy into a relatively expensive business!

If you must chose a business with a buy-in cost, chose one that costs no more than $100. Why this limit? Because, as an expert in part time businesses or side hustles, I know that consumer protection laws are written a certain way, as they should be.

Run from Inventory Loading!

Someone trying to sell you on the idea that IF you invest more you can make more, as it is not true and quite likely illegal too. That IS a swindler in action!

As a matter of fact, the Business Opportunity Rule that the Federal Trade Commission (FTC) put into place in 2013 forces any business opportunity of $500 or more to send prospective buyers a bunch of disclosures at least 30 days before you spend your money. And, in some U.S. States, that amount is only $200!

Put another way, my experience has taught me that most direct selling businesses do not require an investment to be viable or for participants to earn a solid side hustle income. So, please, don’t get sucked in.

You might think of something like driving part time for Uber or Lyft as a side hustle and it is, but . . . and this is a big but . . .  you lose the home office deduction. And, though you gain a car deduction, you also get a gift with that, which is in the form of expensive car repairs and the need to replace your car sooner!

Home office deductions are different. You do not incur additional costs, instead you can deduct expenses you already have.