Your short/long term losses will not entirely offset the income from your side hustle. Your net income from self-employment is taxed two ways on your return: ordinary income tax and self-employment tax
The first of these is the "ordinary" income tax on the profit from your side hustle, which will be added to all your other income sources (including stock/futures/forex gains and their corresponding losses.) Your losses will be applied again this years gains first, and then up to $3000 of losses can be reported on this year's return (with additional losses being carried forward.)
The second set of taxes included on the return is for self employment taxes. Sole proprietors pay both the employer and the employee side of social security and Medicare taxes on their net business profit. Even if you had an AGI of $0 after including capital losses to offset your Schedule C income, you will owe these taxes on your return. The tax rate for self-employment taxes is 15.3%
Keep in mind that the taxes on your side hustle are based on the net profit from that work. If you started at $3000, but you had (and kept track of) expenses that were incurred to generate that income, your profit is something less than $3000.
If you don't owe more than $1000 when you file the return, there won't be a penalty for underpayment of estimated taxes. If you expect you won't owe more than this amount when you file, you can skip the estimated tax payment.
For most individuals, making an estimated tax payment before January 15th to offset at least the self employment tax component would be a smart planning move. If you miscalculated your profits and overpay your tax liability, you get the money back in the form of a refund when you file.
Clarissa
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