Vetreprenuers: Learn About Taxes Here!

If you are thinking about starting a side hustle while still serving in the military you obviously have to pay taxes on the extra money you have earned! This can be incredibly confusing if you are just starting out, but thankfully there are a LOT of helpful articles, videos, and free local agencies that can help you out! You’re never alone in the journey! Check out the description box of this VIDEO to learn about local agencies that you can consult with that will teach you everything you need to know!

Federal Tax

I stumbled across a REALLY good article by Ramsey Solutions (about federal texes) if you are more of a do it yourself person! Check it out HERE. It explains everything you need to know!

State Tax

Once you have your federal taxes figured out, you then need to factor in your State Taxes and Municipalities. Municipalities is just a fancy word for city tax. So, once you know the percentage….factor that into your sale price. (Example: South Dakota statewide tax is 4.5 percent. Municipalities vary from 1.5 to 2 percent) You might need to add a contractors excise tax if you are doing construction, etc. It’s an extra 2 percent in South Dakota.

Your first time or two might be difficult…but it’s literally the same for each individual sale. Those individual sales will rack up, but you’re smart and set aside the taxes! Add this to your accounting software….or an excel sheet, then BOOM! You won’t get blind-sided when it’s tax time!

Who Pays The Taxes? You or the Customer?

In my personal opinion, and what works well for me is figure out what your rate is first. How much money do you want to make per EACH transaction. Once you figure that out, then factor taxes in and add that to your overall price. So….yea, taxes suck…but if you do it right you aren’t “technically” paying them….the consumer is!

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