A big surprise many new entrepreneurs experience is their first-year tax bill! For example, a new social media influencer on TikTok receives money from TikTok each month. Many spend that money without considering taxes.
What many new entrepreneurs don’t realize is that the money they received throughout the year isn’t really theirs. A significant percent of money earned is owed to the IRS.
15.3% of net income is owed in self employment tax. Then an additional percentage is owed for federal and state income tax.
Proverbs 22:3 says, “The prudent see danger and take refuge, but the simple keep going and pay the penalty.”
If you have a new side hustle, begin saving for taxes. This discipline will save you interest, penalties and the shock of owing money you don’t have.
