In a KTLA 5 News segment, hosts discuss the growing trend of side hustles with tax attorney and business accountant Mark Kohler. Kohler explains that whether an employee must disclose a side hustle depends on contractual obligations or company policies; most employers only restrict activities that compete with their business. He advises that if a contract requires disclosure, employees should be upfront, but otherwise they can operate without informing the boss. Kohler outlines tax advantages of side businesses under the Tax Cuts and Jobs Act, noting deductible expenses such as phone, home office, travel, and internet. He emphasizes the financial security and career growth benefits of side hustles, describing them as a “gateway drug” that can lead to full‑time entrepreneurship. Personal examples (Uber driving, hair and nail services, writing books) illustrate the variety of side gigs. The segment concludes with a reminder to check Kohler’s website for more guidance.
Chapters
Uber and Lyft are just two of the thousands of part time jobs that are driving a popular work trend called the side hustle.
It is defined as any type of employment undertaken in addition to one's full time job. A side hustle is generally freelance or piecework in nature, providing a supplemental income, but earning that extra money. About that side hustle, Joining us with answers is business accountant and tax attorney Mark Kohler. He's the author of the Tax and Legal Playbook and Game changing solutions to your small business questions. Hello. Hello, good morning.
I am so excited to be here. This is such a great topic.
We're excited to have you. So do we have to tell our full time employer that we have a part time side hustle thing?
Well, with all these legal questions, it always depends. It's a tricky question. First, if you don't have a contractual agreement or some sort of employee handbook or statement of policies you've signed, you do not have any duty legally or ethically to say, hey, I've got a little side business. But if you have signed a contract and you want to look at your employment agreement on what they might restrict
you on, and so legally they can prevent us from doing the side hustle.
If you've signed a contract that says I won't, then they can terminate you. So you want to make sure if it's in the company's policies. But nine times out of 10, what they're doing is saying, hey, we don't want you to compete in the same industry. Let's go after our customers, right? Take our secrets. But if you want to drive Uber, start a little online business, do a little fixer upper. Yeah, that's not usually going to be a restriction.
So you shouldn't be worried about just at least discussing it with your boss before you go ahead and do it.
No, you shouldn't. And let's get real. People need this extra income. 50 million Americans have a little side business. Whether they're fixing up a little rental property or selling something, people need this and employers need to realize it's okay. It's coming very common.
And in terms of, you know, the disclosure, do you have to disclose it before you start that side hustle or can you start it and go, you know, this is working out, I better tell the boss.
That's a great question. Now again, if contractually you're required to disclose, don't get sneaky upfront. Just say, hey, I'm going to do this. The policies say I need to check with you first. It doesn't conflict. Will you let me do it? But if there's no disclosure requirement, don't keep it quiet. Your side hustle is your side hustle. Get out there and make money at it and don't bring it up. Don't talk about it at the water cooler. Just make some money on the side.
How do we report income from folks?
Okay, well, this is another wonderful opportunity. Not only are you making some extra income, it's a side business where you can save taxes. This new Tax Cuts and Jobs act was harder on employees, but very friendly to Main street businesses. The government wants you to start a side business. You're stimulating the economy. You're going to get write offs for your cell phone, home, office, travel, dining, your Internet. This is all. And so that side hustle could save you taxes and really help you supplement your income.
So cost versus benefit. Do you think most people, it's a good idea to do this?
Having a side. This is what I talk about in my books and on my newsletter every week is this is the American dream. Let's embrace it, take it. Let's make a little extra money, pay off some debts, maybe build our retirement a little quicker, fund our Roth. And if the employer does ask, I want to interject this. If your employer does find out.
Yeah.
Don't be evasive, say, yeah, it's making me a better employee. I have more security financially and guess what, it's made me a better employee because I know what you're going through. I've learned a lot about owning my business. I want to help our business.
Do you notice that? Because it's scary to start your own business and to leave your full time employment. This is a way to kind of ease yourself into, to maybe something that could be a full time job.
It is. Yeah. And it's a gateway drug, right? I mean all of a sudden you're like, man, this is pretty cool working out on my own, you know, and but here's the thing. Some people say, oh, it's scary to start a business. I say it's scary not to. Are you really going to put all your eggs in your day job? That one basket. And if anything goes wrong in your day job, what are you going to fall back on?
Right?
Why not have a couple little side businesses? That boy, if there's a change in my employment, I can give it a little more time maybe. I feel that gateway drug take me in a whole other direction. And I live in my dream, getting up every day, excited about what I'm doing. What are your side hustles.
He doesn't have to disclose.
I do hair and nails, drywall, you name it. Yeah, Uber. My side hustles was writing books and just helping people do this. Really? My wife's like, you're staying up tonight or write another book. I'm like, if I start another book, shoot me. But that's my side hustle.
Thank you. Mark Kohler, business accountant and tax attorney. You can check out his website and follow him on social media. And if you want to book your manicure and pedicure.
That's right. I'm doing Fanny and Peddy's out there.
