Cash on Campus Navigating Legal Tax and Work Rules for Self-Employed Students

Introduction

Balancing coursework, campus life, and a side hustle can feel like a juggling act.
For students who want to earn money through freelancing, tutoring, or selling handmade goods, the challenges extend beyond finding clients. Legal and tax obligations, campus work‑policy limits, and the mechanics of invoicing can quickly become overwhelming.

This guide walks self‑employed students through the key rules that govern their finances while keeping them compliant with federal, state, and campus policies. It also offers practical templates and tools to help you stay organized.

Key Takeaways

• Legal structure matters: Most students start as sole proprietors, but consider an LLC for liability protection if your earnings grow.
• Campus rules impose limits: Verify your university’s work‑hour policy and document your hours.
• Tax filing is mandatory: Report all business income on Schedule C; pay quarterly estimated taxes if required.
• Deductible expenses reduce tax burden: Keep receipts, track mileage, and claim home office costs.
• Professional invoices win clients: Use a clear template, track status, and follow up politely.
• Expense tracking prevents surprises: Use digital tools and maintain organized records.
• Financial aid reporting is crucial: Declare all earned income to avoid penalties.

With these guidelines, you can focus more on your craft and less on legal headaches. Keep your records neat, stay on top of deadlines, and let your campus hustle thrive within the bounds of law and policy.

Legal structure matters

Most students start as sole proprietors, but consider an LLC for liability protection if your earnings grow.

Campus rules impose limits

Verify your university’s work‑hour policy and document your hours.

Tax obligations

Even if your business makes a small amount of money, you may still need to file:

• Self‑employment income is reported in the “Other Income” section.
• Provide your total gross receipts and then subtract allowable deductions to calculate net income.

Filing Schedule C

• Submit Schedule C with your annual tax return.
• Use a simple budget sheet that lists your income, deductions, and estimated tax payments.

Compliance with financial aid rules

• Report all earned income on FAFSA; failure to do so can result in penalties or loss of aid.

Resources and Tools