Taxpayers with more than one job generally have more complicated tax returns. They can also run into tax problems if they don’t have enough taxes withheld during the year or make estimated tax payments.
If you have multiple jobs or a job and some side gigs, make sure you understand your withholding amounts and estimated tax payments. Otherwise, you could face a big tax bill, late payment penalties, and interest when you file your tax return.
Withholding and Estimated Taxes
You’ll need to fill out a W-4 form for each employer you work for. Make sure you account for your other income whenever you complete a W-4 so that you have enough taxes withheld throughout the year.
If you have a main job and a side job, you may choose to claim your normal allowances for the main job and zero allowances for the side job. You can also choose to have an additional dollar amount withheld from each paycheck.
If you work on the side as an independent contractor, you can either increase your withholding to account for the extra income or start making estimated tax payments. You don’t want to overpay too much, but you do want to avoid underpayment penalties and surprise tax liabilities.
Tax Return Problems
If you go to file your tax return and owe thousands in taxes and penalties, you might feel shocked and frustrated. However, you should know that you have options, even if you can’t pay your full tax bill right now.
Monthly payment plans may be a good option. You can work to find a plan that fits your budget and that the IRS will approve. Penalty relief can also be requested in some cases, which reduces the balance you owe.
Taxpayers with multiple jobs may delay filing their returns because of the complexity involved. However, this just leads to further tax penalties and doesn’t resolve your problems.
The more sources of income you have, the more work you’ll need to do to comply with the tax laws. If you owe back taxes, penalties, and interest to the IRS or state tax authority, contact a tax resolution to discuss your options.
Get help resolving your state or federal tax debt problems by calling The Gartzman Law Firm at (770) 939-7710.