What Is Irregular Income?
Irregular income is a type of income that is not consistent or predictable. It can include sources such as freelance work, part time jobs, bonuses, commissions and more.
Advantages and Disadvantages of Irregular Income
Irregular incomes can be great for those in search of additional income streams or people who do not want to commit to the same job or profession on a long-term basis. However, these types of incomes are often inconsistent – meaning it’s hard to anticipate how much money you will have each month. In addition, irregular income typically does not provide access to employer-sponsored retirement plans like 401(k)s or health benefits found with full-time employment.
Tax and Planning Implications of Irregular Income
Because of its unpredictable nature and lack of traditional employee benefits associated with regular jobs, irregular income may require some planning in order for you to make ends meet and save for the future. For example, budgeting becomes critical when working multiple gigs. Without budgeting it’s easy to spend excess amounts earned from an unexpected bonus on nonessential items instead saving for possible future needs.