You will likely owe more tax than you realize on any extra income
Some of you have too much free time and are eager to fill it with more work. But more likely, you have mountains of debt and you need some extra income. Either way, you need to make sure you understand how moonlighting and side jobs affect your taxes. Many people don’t understand the tax rules concerning moonlighting jobs, and get nasty surprises come tax time. Read about the 3 most common issues people forget about moonlighting taxes on our new “Moonlighting” page, which is part of the Taxes are of our site.
Is there really a PSLF “tax”?
No. There is not a PSLF “tax”. HOWEVER, if you are shooting for Public Service Loan Forgiveness, any extra income you make will end up raising your payments and lowering forgiveness. The net effect works JUST LIKE a tax, in that 10% (or 15%) of your pay will eventually wind up in the hands of the government, on top of the “real” taxes you will pay. See the “Moonlighting and PSLF” section of our Moonlighting page for an explanation. Those extra shifts you take may not be worth as much as you think…
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