Key takeaways
- About 1 in 3 Americans (33%) had a side hustle in early 2026, earning an average of $1,242 a month, according to LendingTree’s own survey of about 2,000 U.S. adults (March 2026).
- The cheapest side hustles to start use skills or things you already have: freelancing, tutoring, pet care, reselling and gig apps.
- If you net $400 or more from self-employment, you owe self-employment tax (15.3%) on top of income tax. Setting aside 25% to 30% of profit is a safe rule of thumb.
- New for 2026: companies generally won’t send a Form 1099-NEC unless they paid you $2,000 or more, and payment apps report at more than $20,000 and 200 transactions. All income is still taxable.
The best side hustle is one you can start this week with skills or tools you already have, that fits around your main job, and that pays more per hour than it costs you in time, gas and supplies. For most people, that means freelancing a work skill, offering a local service or picking up flexible gig work.
Side hustles can add up: in the survey above, side hustlers reported earning about $1,242 a month on average, though many earn far less, especially at first. This guide covers low-cost side hustle ideas, how to choose one, how taxes work and how to make the extra money count.
Low-cost side hustle ideas for 2026
| Side hustle | Startup cost | Best for | Things to know |
|---|---|---|---|
| Freelance writing, design, bookkeeping or coding | Low (computer, portfolio) | People with a marketable work skill | Highest hourly potential; check your employer’s moonlighting rules |
| Tutoring or test prep | Low | Teachers, students, subject experts | Online platforms or local clients; background checks may apply |
| Rideshare and food delivery | Low if you have a car | Flexible schedules | Track mileage; gas, wear and insurance cut into earnings |
| Pet sitting and dog walking | Very low | Animal lovers with daytime flexibility | Reviews drive repeat business |
| Reselling (thrift, marketplace, online) | Low to moderate (inventory) | Bargain hunters | Profit is sale price minus cost, fees and shipping |
| Handyman, cleaning or yard work | Low to moderate (tools) | Hands-on workers | Some states require licenses for certain jobs |
| Virtual assistant or customer support | Low | Organized multitaskers | Remote and steady once you land clients |
| Content creation (video, newsletter) | Low | Patient builders | Slow to earn; treat it as a long-term project |
Scam alert: Be wary of “jobs” that pay you to like posts, rate products or complete online tasks and then ask you to deposit money to unlock earnings. Real employers don’t make you pay to work. See our guide to avoiding financial scams.
How to choose and start a side hustle
- List what you already have: skills from your job, hobbies, a car, tools, a spare room or free evenings.
- Set an income goal and a time limit. For example, $500 a month in 8 hours a week, which works out to about $14 an hour after costs.
- Check your job’s rules. Read your employment agreement for non-compete, conflict-of-interest or moonlighting clauses.
- Start small. Test demand with a few clients or listings before buying equipment or paying for ads.
- Open a separate bank account for side income and expenses. It makes taxes much easier. Compare options in our online banks guide.
- Track every expense and mile from day one with an app or spreadsheet.
Job, business or freelancing: which path fits?
| Part-time job | Freelancing / gig work | Small business | |
|---|---|---|---|
| Income | Steady hourly pay | Varies by client and season | Uncertain at first; highest upside |
| Taxes | Withheld from your paycheck | You pay income and self-employment tax | Same as freelancing, plus possible business filings |
| Startup cost | None | Low | Low to high |
| Flexibility | Set by employer | High | High, but more responsibility |
| Benefits | Sometimes | None; you fund your own retirement | None unless you set them up |
A part-time W-2 job is the simplest option because taxes are withheld for you. Freelancing and small businesses give you more control and earning potential, but you’re responsible for taxes, insurance and retirement savings. If your side business grows, our guide to SBA loans explains financing options.
Side hustle taxes: what you’ll owe
Side hustle income is taxable whether or not you receive a tax form. Here are the rules that matter most for 2026:
- Self-employment tax: If your net self-employment earnings are $400 or more, you owe 15.3% Social Security and Medicare tax on 92.35% of that profit, reported on Schedule SE. You can deduct half of it.
- Income tax: Your profit is added to your other income and taxed at your regular rate. Many side businesses also qualify for the 20% qualified business income (QBI) deduction.
- Tax forms: For payments made in 2026, businesses generally send Form 1099-NEC only if they paid you $2,000 or more (up from $600). Payment apps and marketplaces send Form 1099-K if you received more than $20,000 across more than 200 transactions (some states set lower thresholds).
- Estimated taxes: If you expect to owe $1,000 or more, pay quarterly. The last 2026 payment is due Jan. 15, 2027. Or increase the withholding at your main job.
- Deductions: Deduct ordinary business expenses such as supplies, software, a share of your phone, and business mileage. The IRS standard mileage rate is 72.5 cents a mile for January through June 2026 and 76 cents a mile from July 1, 2026.
Example: taxes on a $1,242-a-month side hustle
| Item | Amount |
|---|---|
| Gross side income ($1,242 × 12) | $14,904 |
| Business expenses | −$2,000 |
| Net profit | $12,904 |
| Self-employment tax (15.3% × 92.35% of profit) | $1,823 |
| Federal income tax at a 12% rate (after half of SE tax and the QBI deduction) | $1,151 |
| Total federal tax | $2,975 (about 23% of profit) |
If you’re in the 22% bracket or your state has an income tax, you’ll owe more, which is why setting aside 25% to 30% is safer. See how extra income changes your pay with our take-home pay calculator and read our tax planning guide.
Driving for work? If you drove 2,000 business miles in the first half of 2026 and 3,000 in the second half, your mileage deduction would be $1,450 + $2,280 = $3,730.
Make your side hustle money count
- Build an emergency fund first. Use our emergency fund calculator and keep the money in a high-yield savings account.
- Pay down high-interest debt. Putting side income toward a credit card charging 20%+ is a guaranteed return.
- Save for retirement. Self-employed people can open a SEP IRA or solo 401(k) and deduct contributions. Compare accounts in our 401(k) vs. Roth IRA guide.
- Give every dollar a job with a simple plan like the 50/30/20 budget.
Free calculators & tools
Frequently asked questions
What is the easiest side hustle to start with no money?
Services that use skills you already have, such as freelancing, tutoring, pet sitting or cleaning, cost little or nothing to start. Gig apps are also quick if you already have a car or bike.
How much money can you make from a side hustle?
It varies widely. Side hustlers in the 2026 survey cited above averaged about $1,242 a month, but many earn far less, especially at first.
Do I have to pay taxes on side hustle income if I don’t get a 1099?
Yes. All income is taxable, whether or not you receive a form. If your net self-employment earnings are $400 or more, you also need to file Schedule SE.
Do I need an LLC for a side hustle?
No. You can operate as a sole proprietor under your own name. An LLC can add liability protection but comes with state fees and paperwork.
Can my employer stop me from having a side hustle?
Some employers restrict outside work that competes with them or creates conflicts of interest. Check your employment agreement and company policies.
Related: passive income ideas, salary negotiation tips, free financial calculators.
Updated November 11, 2026: sources refreshed with provider and official data.
Sources: IRS standard mileage rates (72.5 cents Jan.–June 2026, 76 cents from July 1, 2026), Form 1099 filing requirements ($2,000 threshold for payments made in 2026), Form 1099-K FAQs (over $20,000 and 200 transactions), self-employment tax rules and estimated tax deadlines; side hustle share and average income from LendingTree’s own survey (March 3–6, 2026, about 2,049 U.S. adults), cited because no official source tracks side hustle earnings. Tax example calculated by FinInfoBlog and simplified; your results will differ. This article is for educational purposes and isn’t tax or financial advice.
Written by Chanchala
Founder & Lead Writer · B.Sc. Mathematics (Honors) · 9 years in banking & lending
Chanchala is the founder and lead writer of FinInfoBlog. She holds a B.Sc. in Mathematics (Honors) and has 9 years of experience in banking and lending. She writes plain-English guides on savings, CDs, loans, credit and personal finance for U.S. readers, and makes sure every example shows the math behind the money decision. How we research and fact-check.