There’s a growing trend in today’s wayward economy. It started before the actual Recession hit, but has certainly gained momentum in the five years since the stock market crashed. The trend is in bringing in side income. Not only are we being told to hold down a good-paying full-time job, but weekends and evenings should be spent bringing in side money, working a part-time job, or building a business.

Of course, people have been doing this for years, both out of necessity and out of the desire to earn more income. However now, the reasons for doing so have changed. Jobs became scarce for some during the Recession, and the amount of time that employees stay at one particular job has dramatically increased. No longer are we able to rely on our employer to keep us on and pay our health insurance and pension needs. Instead, we have to rely on ourselves and our own abilities to bring in money. This means that it is a great idea to have a Plan B. And why not start Plan B while still going with Plan A, your full-time job?

My History of Extra Income

I’ve done this myself. From March 2009 until February 1, 2013, I worked a full-time job as well as worked on the side building up my online blogging and freelance business. Working four ten-hour days at my day job, I then spent Friday-Sunday writing, tweaking my blog, and gaining an audience. It paid off; as of February 1stI quit my day job in order to pursue my writing and blogging full-time. Being able to test the waters and build the business while still earning a full salary was key in how I’ve found myself where I am today. But I’ve also realized that doing the side business on top of a full-time job really lowered my family’s risk in the event of layoffs and other life transitions.

So, what are the tax consequences of taking on side income or part-time jobs?

Do You Pay Taxes on Extra Income?

This one is easy to answer: income is income, no matter if it is through a full-time job, part-time job, or from mowing someone’s lawn (this could include your kids’ side income as well). So long as you meet the minimum criteria for having to file taxes, then you need to include any of your extra income.

You have to pay taxes on extra income.

Are Taxes Typically Withheld from Side Income?

I have worked many jobs to bring in extra income over my life: farm stands, driving Amish to appointments, and side income from my current business. In none of these circumstances was any tax withheld from my pay. That doesn’t mean that all extra income will work this way, as typically a part-time job will automatically withhold taxes. However, be aware that if taxes are not automatically withheld, it does not mean you do not owe them. When you receive your forms at the end of the year or during tax season, then you will need to pay taxes owed.

Because of this, it is a good idea to set aside part of each paycheck in an account earmarked towards tax obligations. Otherwise, you may not have the money required when you file taxes.

Common Tax Forms from Side Income and Part-Time Jobs

You could be classified as an employee, or as an independent contractor by someone. Some may not classify you as anything, such as if you are mowing people’s lawns and they do not want to report anything to the IRS. Depending on how you are classified, you will receive certain forms.

  • If you are an “employee”, then you should receive a W-2 form (just like from your full-time job). Income, taxes withheld, and the information on this form was generated by a W-4 you filled out at the start of your employment.
  • If you are an independent contractor and have earned over $600 from one company or person, then you will likely receive a 1099-MISC.
  • If you were paid in cash, then you will likely not receive any tax form. In this case, you need to keep an accurate record of the money that you earn and report all of this on your tax return.

Consider the Tax Impact of Extra Income

Earning extra income is a smart move in this economy, and with the changes in our employment works. However, you should weigh the extra money gained against time lost for you personally and to spend with family and friends (of course if you need the money, then you don’t have this luxury). The way to do this is to figure out how much you will make after taxes by knowing your estimated tax bracket, and then seeing if you are still making a decent hourly wage. Will this extra income put you into a higher income tax bracket? Even if your answers to these two questions are not positive ones, if you are building a side business, or genuinely enjoy the extra work, then this could still be a good deal for you.

Do you earn extra income outside of a full-time job? What do you do?

More Tax Topics

Who couldn’t use some extra cash? Perhaps you are planning a trip this year or next, your bills seem to have ballooned out of control, or you are building up your emergency fund. For me and my fiance, we are getting married in April, taking a honeymoon afterwards, and building up our savings after depleting it for the home that we bought. In other words, we could use a lot of extra cash.

As a follow up to 10 Surprising Things You Can Turn Into Cash, I’d like to offer 5 more surprising suggestions for how to make extra money for the goals that you have in your own life. Here they are:

More Ways to Earn Extra Cash

  1. Rent Out Space in Your Home: If you have a spare room you rarely use, basement space, attic space, etc., you can rent your space just like a storage unit. Check out Sparefoot and list your space for rent. Another way to find a renter is through the newspaper, or by posting an ad in an apartment complex. Strike up a contract with your renter, and get paid by check or paypal each month (or charge for a set number of months). Be sure to have adequate homeowners insurance on the belongings in your home to cover your renter’s property, or put a term in your contract that absolves you of any obligations or penalties should something happen to the renter’s property.
  2. Rent Out Your Parking Space: Is your home located near a stadium, an annual festival, or public transportation? If so, you can rent out a parking space to one person by contract, or to people as needed. You can attract people by advertising a rate at half of what they may pay for a parking spot otherwise. Google a sample lease agreement for parking spaces and modify it as necessary.
  3. Raise Guinea Pigs and Sell Them to Pet Stores: Kittens or puppies take up a lot of space, so raising them to sell may not be ideal for many. However, raising guinea pigs takes much less space, and are also a great way to earn extra money. In particular, you can raise them and sell them to pet stores. You can also find brokers who will buy the guinea pigs from you and then sell them to places like PetSmart. Check with a pet store that you would like to sell to because there will be certain qualifications. Typically a guinea pig litter yields four, and it takes about six weeks before they can be sold. What a fun project if you have kids!
  4. Sell Ad Space on Your Car: There are companies that are willing to pay you up to several hundred dollars per month for your prime advertising space: your vehicle. Based upon your use of the vehicle, and the city/state/etc. that you live in, you could be chosen to wrap your vehicle in a banner and become an ad as you drive your kids to school and yourself to work. Check out Driven Media, or Miles of Marketing (for mothers).
  5. Medical Testing: This one typically conjures up images of rashes and strange pills, but I am here to tell you that there are many medical tests that are completely safe and easy to make money from. If you live near a university, you can typically find medical tests that can range from psychological questioning to a blood sample. Check out college newspapers or bulletins to find these. Also, check out Craigslist or the ad section of your newspaper.

More Ways to Make Money

Want to add some extra income to your pockets? If you’ve already analyzed one side of your cash flow with 15 Budget Trimming Tips, it’s time to focus on the income side and find more ways to bring in some extra cash.

Here are some ideas to bring in extra income. Some are quick, some take more time; some are easy, and some are complicated. The more ways you find to generate extra income, the more money you’ll earn.

Feel free to pick and choose the ideas you like that fit your style to generate some additional money.

How to Generate Extra Income

  1. Credit Card Bonuses. I’m always on the lookout for deals like the Chase $100 sign up bonus and the Discover $50 bonus
  2. Negotiate a Raise. Start with your current job and ask for more money. If you think it can’t be done because of the economy, or because of the way your job is structured, see how my husband Negotiated a Raise for inspiration.
  3. Try it Out Incentives. Many companies are willing to give you a bonus to try out their service. The Lending Club $25 Sign Up Bonus is a great example.
  4. Surveys. Answering surveys can be an easy task that you do while watching TV. Cash Crate has a ton of surveys and offers that you get paid to complete!
  5. Bank Bonuses. I love signing up for bank bonuses, like the ING $25 Sign up Bonus. Cheap money, and it takes very little time!
  6. Test Drive Cars. Have a Saturday afternoon free? Why not take a new car for a spin and earn some money for test driving a car. (Update: A reader pointed out that many people are having trouble getting their rewards. You may want to skip this one for now.)
  7. Turn Your Hobby into a Business. If you have a hobby you enjoy, explore ways to earn an income from it. For example, I turned my personal finance interest into a business by making money blogging.
  8. Get a Seasonal Job. Depending on your profession, you might be able to pick up a second job. Tax season for preparers, holiday season for gift wrappers, and summer child care all present lots of opportunities. Even if a second job doesn’t sound appealing, if you limit it to a month, it might not be that bad.
  9. Credit Card Arbitrage. Credit card bonuses not enough for you? You can always take it to the next step with Credit Card Arbitrage.
  10. Freelance Work. Freelance work isn’t limited to just writing! Elance has all kinds of skill sectors for freelancers looking for work.
  11. Enter Contests. While it may not bring in a steady income (or any at all), entering sweepstakes is a fun hobby. And if you enter enough, chances are, you might win something.
  12. Passive Income. I’m working on getting started in Real Estate Investing to broaden the scope of our passive income.

What have you done to bring in more income?

More Ways to Make Extra Money

In general, I don’t usually write about writing or blogging. I assumed that most of you weren’t very interested. However, I’ve received plenty of emails and questions lately about it, so I thought I would address how the blogging business model works as a way of bringing in income. And I know many of you are passionate about income, so we’ll touch on that aspect of it.

Making Money Blogging

Can you make money blogging? Sure. Although I wouldn’t say it’s easy money. The vast majority of bloggers don’t make much, if any, money.

However, if you pick the right niche, write great content, and are good at networking, you might just find yourself a pretty nice side income.

Although, be careful, if you pick a topic that you’re not passionate about, you’ll probably burn out quickly. On the other hand, if you pick a really obscure topic that you’re passionate about, but not many other people are, you probably won’t find it to be very profitable…. but you will have fun!

My Dollar Plan

From the beginning, I had plans to monetize My Dollar Plan and listed it as one of my goals, along with helping others learn about and find answers to personal finance topics and documenting all my finance ideas floating around.

The first few months I didn’t make much, but after six months I was earning enough to at least pay for the laptop I was working on. Fast forward a year, and I’ve found that the side income has grown substantially. Here’s how I did it.

Getting Started

Once you have an idea, there’s some setup work that you need to do to get going. Here is what I found to be the most successful start up plan.

  1. Web Hosting and Domain. Get a web hosting plan with a real domain name (for example, is a domain name); free hosting services like limit your future advertising options. Right now, I use managed hosting from Netcrafted. I originally started with a cheap host but had a bunch of problems.

    When you sign up, it’s best if you can find a .com domain; however, many of the good names are already taken. A .net domain name will also work but I would avoid domains ending in .info, .biz, .us or the like. Godaddy has a domain checking tool you can use during sign up to find available names.

  2. Publishing Platform. Download and install WordPress, the software that you will want to use for your blog. It does all the behind the scenes web work. And best of all, it’s free! If you use Netcrafted, it’s optimized for WordPress.
  3. Design and Logo. I use a free WordPress theme. You can find lots of options over at the WordPress Theme Directory. I’m not graphically inclined so I have all of my logo work done by Logos for Websites. I highly recommend them!
  4. Start Writing. When possible, try to keep one idea per post. It’ll help your readers and keep you focused. Remember that people like to scan when reading on the internet; use header sections, bold words, and bullet lists where possible.
  5. Network. Once you start writing, you’ll want to network with other writers. You can do this by linking to their relevant articles, leaving comments at their sites, and using various social media outlets, like Twitter, StumbleUpon, and Facebook. In addition, writing guest posts for other blogs that are in your niche is a great way to get exposure. If you decide to write a personal finance related blog, I’d be happy to feature a guest post at My Dollar Plan, just let me know.

Explore Advertising

Once I launched my site, I spent some time focusing on writing great content, establishing a reader base, and networking. Once those were headed in the right direction, I turned my efforts to advertising.

I’ve experimented with various advertisers. Some are more successful than others; it depends on your niche and writing style. I’ve found trial and error to be the best way to sort through the advertisers. Here are some of the advertisers that I’ve used in the past:

  1. Adsense. Google AdSense is probably the easiest advertiser to use and was my very first one. I still use it today. You make money when people click on an ad that displays on your site. A single click can earn anywhere from a few pennies to a few dollars.
  2. Affiliate Networks. If you ever talk about products you use, you may want to check out Commission Junction. Affiliate sales pay you a referral fee for referring products or services. They have many well known and respected companies that you can sign up with, such as TurboTax and The Wall Street Journal. A completed referral can earn anywhere from a few dollars to over $100.
  3. Text Links. Text links are an advertising option, however you could be penalized for using them by Google. The links can appear in your sidebar or footer, and provide a link to the advertisers site. These links can fetch anywhere between $10 to $100+ per link, per month. I don’t use these though, so I don’t recommend any.
  4. Display Ads. Many of the graphic ads you see in the sidebar are from advertisers who contact me directly. Be sure to include a contact page for people to email you. These ads typically pay based on the number of times they are viewed and can range from less than $1 to over $5 per 1,000 views.
  5. Paid Posts. I don’t do these, so I really don’t have any information to share about them other than I know there are always people contacting me to do these. I always want my readers to know that what they are reading is my thoughts and opinions and not that anyone paid me to write something.
  6. Personal Referrals. While this isn’t a traditional means of advertising, you can earn money from it. I often use my personal referrals for products when they offer a sign up bonus. The Chase Disney $200 Sign Up Bonus is a great example. Referrals can earn anywhere from a few dollars to over $50 per sign up.

Technical Support

One of the toughest things for me in the blogging world is the technical expertise. I’m a personal finance junkie, not a computer whiz. I was lucky that my business partner is a computer programmer. Oh yeah, he’s also my husband!

It’s important that you know your strengths and weaknesses. If your weakness is computer stuff, like me, you’ll want to find someone you trust to help you navigate the technical stuff.

Action Plan

I hope that helps answer the questions you had about making money from blogging. I’ve found it very enjoyable, but like anything, it’s not for everyone. If you do plan to give it a try, good luck! Be sure to drop me a note and let me know how you are doing!

Now, back to our regular personal finance topics…

The following is a guest post from Tina at Frugal Sisters. Tina found that while she was paying off debts, she wasn’t getting anywhere fast. She has gotten serious about her finances, and is working hard to pay off debt and make better choices.

If you’re looking for more ways to generate extra income check out our list of free money offers for lots of ways to make extra money right now!

Hard Times and Desperate Measures

People are having a harder time raising the money to pay their bills. Some people are willing to do just about anything, including selling platelets, donate eggs and sperm, and selling their hair, to make enough money to survive.

According to the article Short on Cash at MSNBC, there has been a significant increase in people inquiring about selling body fluids and parts.

“Increasingly, industry officials say people are hoping to trade spare body fluids, tissues and other parts for payments that can range from $20 to $50 a pop for blood plasma to $60 to $100 for a shot of sperm, $200 for a shiny ponytail and up to $7,000 for a fertile egg.”

Selling Body Fluids

Time commitment. Be aware that selling body fluids is not an hour process. You will be tested to make sure that you are in good health and disease free. In the case of fertile eggs, it can take up to six months before you see your first paycheck. You need to be prepared to be turned down after going through a lot of tests and find another way to get some extra money.

Impact on body. From personal experience, donating fertile eggs can be very taxing on your body. If you are afraid of needles, this is not the way for you to snag money to pay for college. You will automatically be turned down if you are over the age of 32 and at some clinics 29 years old is the cut off.

Time and travel. Check with clinics that pay for plasma. Some clinics only pay for your time and travel, not for the plasma itself.

Frequency. You are also restricted to how often you can donate. In the case of plasma, you can donate twice a week. Sperm donations can be made up to 10 times per month. Fertile egg donations will depend on the clinic and your health, but it does take a month to go through the process to be able to donate eggs. Donating enough hair to make a wig can take up to a year or more depending on how fast your hair grows. Some organizations will not take your hair if it has been colored or permed.

Motivation. Some people do donate because they want to help and the money is just a bonus. Helping couples to bring home a healthy baby or someone who needs plasma or giving hair to make a wig for someone going through cancer treatments is more of a motivation than the money.

Check out The Hair Trader if you are interested in selling your hair. To find a blood bank near you to sell plasma, go to Call your local fertility clinic to inquire about selling eggs or sperm.

More Ways to Make Money