Core Insights - Side gig income is fully taxable and treated as self-employment income by the IRS, requiring reporting if net profit exceeds $400 [2][7] - Taxable income is calculated on net profit after deducting ordinary and necessary business expenses, emphasizing the importance of good record keeping [3][5] - All income must be reported, regardless of whether a 1099 form is received, as personal records determine taxable profit [6] Tax Reporting - Side gig workers typically receive Form 1099-NEC or 1099-K, which reports gross payments, not net profit [4] - For example, if a worker earns $22,000 and incurs $7,000 in expenses, the net taxable income would be $15,000 [5] - Multiple 1099s from different sources should be combined on one Schedule C to calculate total net profit [6] Tax Obligations - Side gig income incurs both income tax and self-employment tax, highlighting the dual tax responsibility for gig workers [7]

Core Insights - Retirement savings can be challenging for individuals without access to employer-sponsored plans, particularly for freelancers and those with side gigs [1] - IRA contribution limits are relatively low, with a maximum of $7,000 for most workers and $8,000 for those aged 50 and older in 2025, which may not suffice for substantial retirement savings [2] - The solo 401(k) presents a viable alternative for self-employed individuals, allowing contributions up to $70,000 in 2025 without needing an employer-sponsored plan [3] Eligibility and Features - A solo 401(k) is designed for self-employed individuals and small business owners with no full-time employees other than themselves or their spouses [4] - Many Americans may qualify for a solo 401(k) without realizing it, as approximately one in four now earn income from side hustles, often missing out on tax advantages and compound growth [5] - Eligible income sources for a solo 401(k) include freelancing, consulting, contract work, side businesses, and sole proprietorships [6] - Contributions can be made as both an employee and employer, allowing for up to $23,500 as an employee (or $31,000 for those aged 50+) and additional employer contributions based on income, with a combined maximum of $70,000 or 100% of eligible compensation [6]