There are literally thousands of different ways to make money on the side, most of which are great for generating some extra cash. However, there are also some that sound completely legit but that, once you look a bit closer, are actually considered as being illegal side hustles.
Of course, there are some side gigs that are very obviously dirty ways to make money. For instance, you wouldn’t find too many people recommending that you rob a bank as a method to boost your income.
(And if you’re looking for that kind of inspiration, perhaps a better point of reference is something like the book Money for Nothing: The Ten Best Ways to Make Money Illegally in North America. None of which we support here, just in case that needs to be said.)
But there are other side hustle ideas that seem perfectly fine at first glance or that may even be completely legal in certain circumstances. However, in reality, they could actually involve you breaking the law if you try them out – even if you don’t mean to!
So keep reading to see some red flags that you may want to keep in mind before launching your next side hustle.
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What are some illegal side hustles?
1. Reselling certain items
It’s pretty obvious that selling some things without certain requirements being followed is going to be illegal, like a weapon. But there are other seemingly normal items where, if you sell them, you could actually be breaking the law.
Most of these are due to health and safety concerns but there can be other reasons too. And in some cases, while you may have bought the item completely legally originally, reselling it can get you into legal hot water.
This is why, if you’re looking to make money from selling things, it may be a better idea to focus on things you can make and sell yourself.
Some examples of things you shouldn’t resell without double checking any local laws that may apply include:
- Cribs – Specifically, cribs made before June 2011 don’t meet regulations and so can’t be resold in the US.
- Children’s metal jewelry – Older jewelry designed for kids has been found to have high levels of lead and other unsafe elements. Guidelines for when these can be resold can be found here, but the standard advice is that these are a no-go for resellers.
- Replica coins – Strangely, while you can buy and sell fake paper notes, reselling fake coins is actually illegal.
- Kinder Surprise eggs – Don’t bring these into the US from Europe or Canada to resell as you can be fined up to $2,500. In fact, in one year, U.S. Customs and Border Patrol apparently confiscated 60,000 of them! (The fairly similar Kinder Joy eggs are fine though, it seems)
- Prayers and fortune telling – Some places don’t allow you to sell intangible products online, with examples of this including prayers and fortune telling.
- Dreamcatchers – Not all dreamcatchers are illegal to sell, but you have to be careful as to which feathers are included with yours. If there are any from any migratory birds, such as an owl or a hawk, you could be in breach of laws relating to protected species.
2. Running a dog bakery
Launching your own dog bakery is becoming increasingly popular as one of the more unique side hustles out there. After all, the dog treat industry in the US alone was worth more than $2.36 billion last year, so there’s plenty of business to go around!
However, you may be surprised to hear that, much like human food, you can’t simply bake some dog biscuits and sell them without any further steps being taken. In fact, this can quickly turn into an illegal side hustle (and leave you open to some pretty hefty fines) if you don’t follow all FDA requirements regarding your dog treats.
- The treats are safe to eat
- You confirm that they contain no harmful substances
- Importantly – you ensure that they’re accurately labeled
This can all sound a bit daunting when you’re trying to start your new dog treat side hustle, but it doesn’t have to be as scary as it sounds. And this is especially the case when you consider that some people, like Kristin Larsen, turned her dog bakery side hustle into a six-figure business!
And her course, Diva Dog Bakery, shows you exactly how to do the same. This includes all the information you need to not break the law, especially regarding safety and labelling requirements.
Or take a look at our detailed Diva Dog Bakery course review to find out more!
3. Under the table jobs
This one isn’t quite as obvious as it first seems, in that despite what you may think, under the table jobs themselves aren’t actually illegal side hustles.
But it’s what you do with the money you earn from these that can push this over the line of legality.
That is, any money you earn cash in hand needs to be declared. While it may not necessarily be taxable depending on a few things, including how much you’ve earned that financial year, you still need to tell the tax authorities that you earned this money.
Otherwise, you could be committing tax evasion and have the possibility of being fined by the IRS.
This is why, if you decide to take one of these jobs, make sure you keep good records of how much you’ve been paid. This could be as simple as a spreadsheet with one column for the payer, one column for the date and one column for the amount you were paid.
That way, when tax season rolls around, you won’t have any issues in keeping everything above board.
Potential cash in hand jobs you may be interested in:
- 19 Best Online Tutoring Jobs to Make Money From Home
- Best Proofreading Jobs for Beginners to Work From Home
- How to Become a Virtual Assistant (With No Experience)
4. Homemade soap and bath bombs
I don’t know about you, but every market I’ve ever been to has someone selling soap or bath bombs they’ve made at home. You can even often find people selling things like body scrubs or lotion.
It’s no surprise that these can be really lucrative side hustle ideas. Bathroom items like this are relatively easy things to make and sell, plus they smell and look amazing. This means they can be great for your own home or as gifts.
And all of these can be completely illegal money making ideas if they’re not labelled properly.
That is, in the eyes of most countries’ authorities, these are considered as cosmetics and so are very strictly regulated. This even includes requirements relating to the text size and where on the packaging the relevant text has to be placed.
It’s definitely worth doing your research here. For instance, if you’re in the US, I’d recommend taking a look at these Soap and Cosmetic Labelling guidelines, as they cover everything you’ll need to know.
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5. Homemade food
This one may not be as surprising given what we’ve just said about selling dog food, but it’s definitely worth mentioning this illegal side hustle given how common it seems to be.
That is, if you’ve wandered through any market on a Saturday afternoon, you’ve almost certainly seen people selling homemade snacks or dressed up candies for gifts. This is especially popular when it comes to Christmas crafts to sell around the holidays, where people often sell food items for Christmas baskets or stocking stuffers.
But the fact that it’s popular doesn’t mean it’s right, with strict labeling requirements being in place for these too – that a lot of people simply don’t follow.
Specifically, the FDA notes that food labeling is required for most prepared foods, such as snacks, desserts and drinks.
So rather than your new side gig being ruined by the arrival of an FDA warning letter (or, worse, an actual fine), make sure you’re fully aware of the relevant requirements.
6. Selling certain styles of clothes
It’s becoming more popular in recent years for people to source products from overseas and then resell these items at a significant profit in their home country, including clothing.
And some people have had huge success doing this as an additional income stream – which is understandable, as it can be a completely legitimate way to make money on the side.
But it’s important to ensure that what you’re selling won’t see you run into legal problems.
This can be a massively complicated area of the law but, essentially, if you think what you’re selling treads too closely to another company’s intellectual property, be careful. Something like a handbag with Louis Vuitton’s trademark print all over it is an obvious no-no, but it’s not just straight up counterfeiting which can be an issue.
For example, people have also gotten into trouble from selling shoes with red soles on them, as it was found that this infringed Louboutin’s rights. And that’s even when they were completely upfront with customers that what they were selling weren’t actual Louboutins.
Not every similar item you find is going to be in breach of these laws. But given how extreme the penalties are, it’s definitely a good idea to double-check that those handbags you’re importing won’t earn you an ominous knock on the door.
7. Getting free stuff as an influencer
Sure, the idea of making money on Snapchat or starting a blog to earn extra cash sounds pretty incredible. And the fact that a lot of influencers seem to spend their days getting free stuff from all sorts of brands is an amazing perk. After all, who doesn’t like free stuff?!
Well, the IRS, for one.
That is, if you’re an influencer who’s getting packages of free stuff as part of your side hustle, posting it on Instagram and calling it a day, you could have actually broken the law. This is because these things often should be declared for tax purposes.
It’s a good idea to talk to your accountant or a tax advisor as soon as you start any part time online job, including this one, to be absolutely certain about your obligations.
That said, for influencers, this article gives a good summary. It essentially provides that you need to report things like:
- The fair market value of any products you’ve received, even if they were free
- What you’ve been paid for any brand partnerships
- Any money you’ve received for displaying ads
- Payments you got for any sponsored posts
8. Making money from your friends’ updates about their jobs
You may think that making money from your friends’ or family members’ updates about their jobs sounds fairly innocent. But you might also know it by its more official, much more serious name: insider trading.
This is when someone buys or sells stocks based on some non-public information they’ve received. This information, in turn, is deemed to give them an unfair advantage, in that they know before the general public when something is happening with the company. This development can then make the share price go up or down, allowing the person to profit significantly.
Given how much money can be involved here, this is an incredibly illegal money making idea and the courts have given huge penalties when people have been found guilty of this, including prison time.
But you can absolutely see how it happens. In one case, someone’s daughter, who was an attorney, worked from her parents’ place for two weeks. Based on what the father saw and figured out from her updates in general conversation, he worked out that two companies were about to merge and so he bought stocks in one of them just before their value went up.
Similar cases have also occurred when someone was at a dinner with friends, talking about their recent work with a client, or when family members overheard a phone conversation.
The main takeaway from this: If someone tells you something about a company about which they could have confidential information, make sure the info is public before logging into your trading account.
9. Freelance writing (on certain topics)
Freelance writing is a great example of a side hustle. You can work as much or as little as you like based on how many writing requests you accept and you can also set your own hours, making it a really flexible online job for stay at home moms (or a stay-at-home dad job!)
However, while the vast majority of writing assignments will be completely legit with no issues at all, there are some that can raise some legal red flags depending on the topic or where you are.
For example, Brian Robertson was a high school student in Oklahoma when he added a few paragraphs to a story he found on a school computer that discussed how to invade his school. He faced up to ten years in prison and was suspended for a year.
In a similar case, a 15-year-old in California was expelled from his high school and sent to a youth detention center for 100 days after writing a poem on a related topic.
Now, these are quite extreme examples, but it’s always worth being aware of the fact that serious problems can arise when it comes to certain subjects. You may also wish to consider where you live before writing about specific topics, especially if you’re somewhere where writing about political or similar issues may not be considered favorably by the authorities.
Looking for other online side hustles?
- 22 Legit Ways to Get Paid to Read Emails
- 15 Best Sites to do Surveys for Money via PayPal
- 15 Best Transcription Jobs From Home (No Experience Necessary!)
10. Getting people to invest and using that money to pay others
One of the more dirty ways to make money has been around for years, having become well known under the name “Ponzi scheme”.
This is when people invest in a scheme, with the money they invest then being used to pay earlier investors to convince them that the money they invested is actually earning money. It then continues as more and more investors unwittingly join the scheme, funneling more and more money into it.
This continues merrily on its way until, usually, it collapses when investors stop being paid, often because the organizer runs away with the money.
And there can be huge amounts of money involved in this. The largest ever Ponzi scheme involved Bernie Madoff with the size of the fraud being estimated at $64.8 billion. Yes, with a B.
But even smaller Ponzi schemes are still significant, with one actor being arrested by the FBI recently for cheating investors out of $227 million and spending the funds on himself.
Safe to say, if you’re somehow considering this as your next side hustle: don’t.
11. Getting paid to convince your friends to join a program
You’ve probably heard about a program like this – presumably from someone on Facebook who you went to high school with and is now a #bossbabe.
Person A has joined this “amazing new program where you can make money from home”. They convince Person B to join that same program, often with Person B having to put a lot of their own money in as start-up costs.
Person A then gets paid for having “recruited” Person B, who is then expected to convince Person C to join. At the same time, no one involved really appears to be selling anything.
And that’s what a pyramid scheme is – one of the most common but still very illegal side hustles.
It’s important here to distinguish this from multilevel marketing opportunities, or MLMs. While they can be similar – and there are plenty of dodgy MLMs, let’s be clear about that – MLMs aren’t illegal money making ideas.
This means that if someone is talking to you about this amazing weekend job (or similar) that they’ve started and that you should join too, but you’re not sure if everything sounds right, it’s important to do your research.
As a starting point, you may wish to check this article for a great summary of the difference between pyramid schemes and MLMs, including a good checklist you should follow to be sure something is actually legit.
12. Reselling tickets
Many jurisdictions have now clamped down on ticket resales, making it illegal to resell tickets for prices that are a certain amount higher than their face value.
Also known as “scalping”, this generally means that you can only resell tickets for the price you paid for them or, in some cases, for 10% more. The exact rules do vary though depending on which country and even in which state you’re in, not to mention the fact that some events (like soccer matches in the UK) even have their own specific rules on this, so it’s worth double checking.
It’s safe to say though that it’s really not worth even considering this as a side hustle these days. The laws are very strict and getting stricter by the day, especially as things like the sale of counterfeit tickets online has become more of an issue.
13. Adult work
By “adult work”, we definitely don’t mean having to pay bills or working as an accountant.
But in many jurisdictions, actual “adult work” is still illegal. Alternatively, it may be legal in certain circumstances, like at specific registered locations, but can’t be conducted outside of these.
This is despite the fact that a number of websites and apps are out there that pay people for this to some extent – and they could even be available where you are, even if it may not be allowed.
All this means that if you’re considering this as a fully consenting adult, make sure you’re aware of the legalities involved to avoid getting into trouble. You could also look into side gigs that are related to this but that aren’t considered as being illegal money making ideas, such as getting paid to chat.
14. Selling things you bought online
With the exception of certain items, including those listed in the first point on this list, most things you buy are considered as being yours to use how you like, including to resell. This is why, for example, I can sell copies of Harry Potter books I own without getting into trouble with J.K. Rowling or her publishers.
But one big exception to this is reselling electronic copies of things you’ve bought. For example, it was found that 22% of college students report that they have downloaded at least one textbook.
And while a lot of them would have downloaded this for free, some do pay certain sites to access these books – which is still piracy.
(They would have been better off checking out one of these online jobs for college students.)
Intellectual property law can be complicated, to put it mildly but as a general rule: an ebook (or other online materials) cannot be resold unless they have specific resell rights. Similarly, if something is marked as being for personal use only, you can’t resell it.
Despite this, there have been more and more sites popping up looking to sell things like ebooks at massively reduced prices.
However, not only are there more effective side hustles out there but, as a general rule, it’s a good idea to not make money from stealing other people’s property – which is exactly what this is.
15. Setting up bets on sports and other events
It won’t surprise anyone to hear that gambling is pretty tightly regulated. This includes the fact that, in most places, bets can only be placed through those who are licensed to accept them.
One classic case of this is bookmaking, which is when a person or company accepts and pays out bets based on agreed odds. They’re often associated with horse racing, but they also accept bets on a range of other events, including elections and other sports.
This is a good example of why it always helps to check the exact rules where you are, as being a bookmaker is actually legal in the UK, but is illegal in most of the US (except for Nevada).
However, this hasn’t stopped people from doing this illegally. So if you’re tempted to set up some betting on an upcoming match as a sort of amateur bookmaker, even if it’s just between some friends or colleagues, maybe take a second look as to whether it’s worthwhile.
One other point to raise too is that when it comes to the question of whether this means that fantasy football is also an illegal side hustle, Reddit has the answer. In brief, fantasy football is considered as being a game of skill, not chance, so doesn’t fall under the various betting/gambling regulations and thus isn’t illegal.
16. Breeding puppies
While puppy mills themselves aren’t illegal (unfortunately), there is a small but growing movement in the US to basically cut off demand.
Given that most puppy mills stay in business only because they are supplying pet shops, the ultimate impact of laws like these is to prevent puppy mills from operating.
More directly, a number of cities throughout 26 states in the US have also established laws that regulate or even, in some cases, ban puppy mills.
So if you’re considering making money on the side from breeding puppies (or any other animal for that matter), I’d strongly suggest finding one of the thousands of alternative side hustle ideas that are out there.
17. Organizing poker nights
You may have had the great idea of organizing some poker nights for people you know and charging an entry fee as your amazing new side hustle.
And this could be a good way to combine making money with your love of a card game! But just be careful not to set the stakes too high or to let the fun go on for too long.
After all, if you earn more than $2,000 a day or remain in operation for more than 30 days, federal law says you’re officially running an illegal gambling business.
Just ask Lawrence DiCristina, who was convicted for exactly that for running games of Texas Hold ‘Em and faced a maximum sentence of ten years in prison.
Meaning that when it comes to this illegal side hustle, you’ve definitely been warned.
Final thoughts on these illegal side hustles
With so many non-dirty ways to make money out there, it’s really a good idea to avoid any blatantly illegal side hustles.
However, problems can arise when something can seem completely legit, but by overlooking one aspect or not realizing the law that applies where you are, you’ve suddenly found yourself in legal trouble.
After all, something like selling things online or at markets is a genuinely good, lucrative side hustle idea. But if you forget to check the exact requirements of the labels you have to attach to your products, you could be faced with a fine that’s way more than you could possibly make from selling soap.
In most cases on this list, some simple research will show you exactly what you can and can’t do.
And as with all ways to make money, it’s always a good idea to first discuss things with a professional. That way, he or she will be able to make you aware of any potential red flags so you can address them immediately before taking your illegal money making idea further and, whether accidentally or otherwise, digging yourself into a legal hole.
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About the author
Anna is the founder of LogicalDollar and a personal finance expert, having been featured on Forbes, HuffPost, Reader’s Digest, MSN Money, Yahoo! Finance, CreditCards.com and many more. She’s committed to helping others get on the path to financial freedom using the experience gained from turning $60,000 in debt into a six-figure investment portfolio. Find out more.