While most individuals have taxes automatically withheld from their paychecks throughout the year, those who are self-employed or function as independent contractors bear the responsibility of remitting their tax payments directly each quarter. Jan. 16 signifies the end of the fourth quarter and the deadline concerning tax payments to the IRS, making it a critical date for those needing to catch up on their financial obligations to the government.
According to the outlet, the IRS highlights that individuals who found themselves owing taxes in the previous year often encounter a similar situation at the close of the subsequent year. Various factors contribute to this scenario, including a failure to adjust tax withholding, income derived from non-wage sources such as dividends, or involvement in complex financial situations.
The scope of taxable income is broad, covering a range of financial inflows. According to the IRS, taxable income includes, but is not limited to, unemployment income, refund interest, and profits from the sale of goods. Even workers participating in the “gig economy” are not exempt from the requirement to declare income earned through side hustles.
Source: Black Enterprise
