---
title: "How to track side hustle income without mixing it into your salary"
description: "How to track side hustle income: a separate account, every payment and expense logged, tax set aside as you go, and the 2026 IRS and HMRC rules on reporting it."
author: "Wealtie Team"
published: 2026-11-03
updated: 2026-11-03
category: "Income & freelancing"
canonical: https://wealtie.com/blog/track-side-hustle-income
---

# How to track side hustle income without mixing it into your salary

To track side hustle income, keep it in a separate account, log every payment and every cost the day it happens, and move part of each payment to a tax pot. All side income is taxable in the US whether or not you get a Form 1099-K, and self-employment tax starts at $400 of net earnings.

## Key takeaways

- All side hustle income is taxable in the US, whether or not a payment app sends you a Form 1099-K, according to the IRS.
- Payment apps and marketplaces only have to send a 1099-K when your payments exceed $20,000 across more than 200 transactions, so most side hustlers won't get one.
- Self-employment tax of 15.3% applies once your net side earnings reach $400 in a year.
- A separate account for side income makes tracking automatic: everything in is income, everything out is a cost or a transfer to yourself.
- In the UK, the first £1,000 of trading income a year is tax-free under the trading allowance; above that, you register for Self Assessment.

## How do you track side hustle income?

Give it its own account, log every payment and every cost as it happens, and move a share of each payment to a tax pot. That's the whole system, and it takes a few minutes a week.

Side income is easy to lose track of because it arrives in small, uneven amounts from different places: a payment app on Monday, a marketplace payout on Thursday, cash for a weekend job. Mixed into your salary account, it disappears into everyday spending. A year later, nobody knows what it came to.

## Do you have to report side hustle income?

Yes, all of it. "All income, no matter the amount, is taxable unless the tax law says it isn't – even if you don't get a Form 1099-K," says the [IRS](https://www.irs.gov/newsroom/form-1099-k-faqs-general-information).

That matters because most side hustlers won't get a 1099-K. Payment apps and online marketplaces only have to send one when your payments for goods or services exceed $20,000 and there are more than 200 transactions in the year. That threshold was restored by the One, Big, Beautiful Bill. Some platforms send forms for smaller amounts anyway, but no form doesn't mean no tax.

Self-employment tax applies too. If your net earnings from self-employment are $400 or more in a year, you pay [self-employment tax](https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes) of 15.3%: 12.4% for Social Security and 2.9% for Medicare. That's on top of income tax.

:::callout{type="note"}
In the UK, the first £1,000 of gross trading income a year is tax-free under the [trading allowance](https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income), and you don't need to tell HMRC about it. Above £1,000, you need to register for Self Assessment.
:::

## Why use a separate account for side income?

Because it does the tracking for you. Everything that comes into it is income, and everything that goes out is either a cost or a transfer to yourself.

Open a second current account, even a free basic one, and give every client, app and marketplace that account's details. Pay side costs from it too: materials, fees, a share of your phone bill if you use it for the work. At the end of the month, the account statement is your record.

Keep a note of where each payment came from: which app, which client, which job. If one source is earning most of the money, you want to know.

## What should you record for each payment and cost?

The date, the amount, where it came from or went to, and what it was for. Four facts per line.

| Date | In or out | Amount | Source or payee | What for |
| --- | --- | --- | --- | --- |
| 3 Nov | In | 450 | Client A | Logo design |
| 8 Nov | Out | 30 | Design software | Monthly subscription |
| 15 Nov | In | 150 | Marketplace | Two prints sold |
| 18 Nov | Out | 50 | Print shop | Printing costs |

Keep receipts for the costs. In the US, the 1099-K shows gross payments, not what you spent to earn them or what you paid for items you resold, so your own records are what let you claim the costs.

## How much of your side income should you set aside for tax?

Enough for self-employment tax plus income tax at your top rate. For many people that's 25% to 30% of side profit, set aside as each payment lands.

Here's a worked example in round numbers. A month with 600 of side income and 80 of costs leaves 520 of profit. At 25%, 130 goes to a separate tax pot the day the money comes in, and 390 is yours to spend or save.

The exact share depends on your income and where you live. [How much to set aside for taxes when you're self-employed](https://wealtie.com/blog/set-aside-for-taxes-self-employed) works through the 2026 IRS and HMRC rates at three profit levels.

## How do you budget with side income?

Budget your month on your salary alone, and treat side income as extra with a job to do.

Side income is uneven. Build your rent, bills and spending around it and a slow month turns into a short month. Instead, decide what the side money is for: paying down debt faster, building an [emergency fund](https://wealtie.com/blog/how-much-emergency-fund), or a specific goal. Then move it there once the tax share is out.

If side income grows to a big share of what you earn, [how to budget on irregular income](https://wealtie.com/guides/irregular-income-budget) is the better model.

## How do you track side income in an app?

Add the side account as its own account, log income with its source, and look at the month's total next to your salary.

In Wealtie, the Free plan includes two accounts, so your main account and your side account sit side by side in one net worth total, and a monthly income goal shows whether the side money is on track. Data export gives you a ZIP of CSV files for your tax return. On Pro, the [income tracker](https://wealtie.com/income-tracker) adds income by source, a stability score and a projection, so you can see which side gig pays and how steady it is.

## Questions people ask

### How do I keep track of side hustle income?

Use a separate bank account for it, log every payment and every cost as it happens, and record which platform or client each payment came from. Once a month, total the income and costs and move a share to a tax pot.

### Do I have to report side hustle income if I don't get a 1099-K?

Yes. The IRS says all income is taxable unless the law says otherwise, even if you don't get a Form 1099-K. Payment apps only have to send one above $20,000 and 200 transactions.

### How much can you make on a side hustle before paying taxes?

In the US, self-employment tax applies once net earnings from self-employment reach $400 a year, and the income counts toward income tax from the first dollar. In the UK, the first £1,000 of trading income is tax-free.

### How much should I set aside for taxes on side income?

Enough for self-employment tax of 15.3% plus income tax at your top rate, which for many people means 25% to 30% of side profit. Our guide to setting aside taxes when self-employed works through the rates.

### Should I use a separate bank account for my side hustle?

Yes. It keeps side income and costs out of your personal spending, makes the yearly total one number, and gives you a clean record if the tax office ever asks.

## Sources

1. [Form 1099-K FAQs: General information](https://www.irs.gov/newsroom/form-1099-k-faqs-general-information) (Internal Revenue Service, checked 1 November 2026)
2. [Self-employment tax (Social Security and Medicare taxes)](https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes) (Internal Revenue Service, checked 1 November 2026)
3. [Tax-free allowances on property and trading income](https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income) (HM Revenue & Customs, checked 1 November 2026)

*This article is general information, not financial, tax or legal advice. Your situation is your own; check the numbers that apply to you before you act on them.*