Summer’s winding down, and as you enjoy the last of those sunny days, it’s also a great time to get your tax situation in check. Whether you’re a gig worker, side hustler, or someone who’s got income not subject to regular withholding, planning now can save you from a potential tax surprise when filing next year.

Here at TaxZinger, we believe in keeping taxes fun, easy, and worry-free! So, let’s chat about how you can dodge those unexpected bills from Uncle Sam with some smart moves now.

Why You Could Owe Taxes Next Year

Picture this: you file your taxes, expecting a nice refund, but instead, you owe the IRS! This happens more often than you’d think. Why? Changes in your job or life—like that side hustle you started or maybe a big freelance gig—can mean you’re not withholding enough taxes throughout the year. And while most of us like to think of tax refunds as a bonus, what’s really happening is you’ve been overpaying all year long. (But hey, no judgment—it’s still fun to get that check!)

Who Should Be Extra Careful?

Gig Economy Workers – If you’re Ubering, freelancing, or renting out your spare room on Airbnb, chances are no one’s withholding taxes for you.
Side Hustlers – Whether you’re selling handmade crafts online or teaching yoga on the weekends, you might not be setting aside enough for taxes.
Anyone Earning Untaxed Income – If you’re self-employed or earning investment income, you’re in charge of paying your own taxes as you go. Don’t forget those quarterly payments!

How Refunds Work: A Quick Refresher

The U.S. tax system runs on a “pay-as-you-go” basis, meaning you need to pay taxes as you earn income. For most, employers withhold taxes from paychecks, but for others—like our gig economy friends or anyone with multiple income streams—you need to stay on top of those tax payments yourself.

Need some motivation? So far in 2024, two-thirds of taxpayers have received refunds, with the average refund being just under $2,900. That’s a nice chunk of change! But to get a refund (or at least avoid owing), you need to make sure you’re paying the right amount of tax throughout the year.

Use the IRS Tax Withholding Estimator

To make sure you’re on track, check out the IRS Tax Withholding Estimator. It’s a nifty tool that can help you:

Estimate your federal income tax withholding
See how changes in withholding impact your refund or tax due
Choose a withholding amount that works for your situation
All you need is your latest paystub and last year’s tax return to get started. If you need to tweak things, simply submit a new Form W-4 to your employer or adjust your estimated tax payments.

Big Life Changes? Update That Withholding!

Got a new job? Just married? Bought a new house? Any big life change is a signal that it might be time to update your tax withholding or estimated payments. Here are a few other reasons to check in with your taxes:

You had a baby or adopted
You started (or ended) a new side gig
Your income changed significantly
Not sure what to do? Don’t worry, TaxZinger’s got your back!

Avoid Penalties and Stay Ahead

Some taxpayers end up with hefty penalties because they underpay throughout the year. Adjusting your withholding or paying estimated taxes can help you avoid that nasty surprise. If you’re self-employed or juggling multiple gigs, staying proactive is key!
“Tax planning now can save you time, stress, and money down the road. So, why not add it to your end-of-summer checklist? Give TaxZinger a call at 1-800-511-3928 or email us at info@taxzingerpro.com to schedule a professional consultation today!”

Not Tax Advice Disclaimer:

The content in this blog is for informational purposes only and does not constitute tax, legal, or financial advice. Always consult with a qualified tax professional to discuss your specific situation. TaxZinger is here to help, but we are not a substitute for personalized advice from a professional.

Now, go ahead and enjoy the rest of your summer—knowing your tax situation is totally under control!