Have you been thinking about starting a side business? A lot of people do.

In “4 Tips For Starting A Successful Side Business,” Carol’s recent post on the Bank of America Small Business Community, Carol shares her wisdom. She begins:

Being an entrepreneur can require a substantial financial and emotional commitment. For many individuals, testing business ownership out on a small scale before making a bigger commitment makes sound business sense. 

For others, having the ability to supplement their other professional endeavors at their own convenience is also appealing. For these reasons, the “gig” economy has really taken hold. While estimates vary widely, we can all agree the number of people with a “side hustle” is in the millions and growing.

However, just because your side business is part time, it doesn’t mean you can abdicate your responsibilities, have sloppy accounting or not take it seriously. To that end, below are four things you should know to make sure that your side hustle or gig business is successful.

1. Treat it Like Any Other Business. Testing a business out on a small scale does not mean you should forget that it is still a business. You should consider creating a separate legal entity, which can help to protect you personally from liability and also make accounting and operational endeavors easier.

This also means you should have a separate bank account and not co-mingle your personal and business revenues and expenses. “Often having a separate business bank account can be a deciding factor in whether the IRS treats this income as a business or a hobby,” said Dee Dee Stone, CPA, a tax strategist for small- to medium-sized businesses and owner of Dee Dee Stone, LLC, who works extensively with hobby-business owners and gig economy entrepreneurs. “Business income is taxed after the expenses have been deducted and businesses can show a loss that offsets other income on the taxpayer’s return. Hobby income is taxed purely on money received with no deduction for expenses incurred to earn it.”

You can read the rest of the post here.