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Gig Workers' Guide to Tax Underpayment and How to Avoid Penalties

Gig Workers' Guide to Tax Underpayment and How to Avoid Penalties

⚠️ Alert to all Gig Workers

Tax Underpayment and How to Avoid Penalties

IRS penalties have surged from 3% in 2021 to 8% in 2023

THE BIG PICTURE

If you're a gig worker or independent contractor, penalty rates that nearly tripled in two years make tax compliance more crucial than ever for protecting your income.

BY THE NUMBERS

  • $1.8 billion: IRS underpayment penalties collected in 2022
  • 12.2 million: Americans hit with penalties
  • 8%: Current penalty rate (up from 3% in 2021)
  • $600: New 1099-K reporting threshold

How Underpayment Penalties Work

What you need to know: The IRS calculates penalties based on:- Amount underpaid- Length of underpayment period- Current quarter's interest rates- Your total tax minus refundable credits

Why it matters

Interest compounds daily and applies to both the underpaid tax AND the penalties.

What's Changed for Gig Workers in 2024

& heading into 2025 ...

1. More Scrutiny   - Digital platforms report all earnings over $600   - Affects full-time and side gigs   - Increased IRS enforcement2. Higher Stakes   - Tripled penalty rate since 2021   - Daily compounding interest   - Penalties on penalties

Do You Qualify for Penalty Relief?

Find out today. Contact Turnout.✓ Tried to comply but faced circumstances beyond control✓ Received a notice but can resolve quickly✓ First-time penalty (first-time abatement relief)

Protect Yourself: Smart Solutions

1. Immediate Actions

  •    - Get AI-powered analysis from Turnout in minutes
  •    - Stop penalties from growing
  •    - Explore payment plan options

2. Payment DeadlinesApril 15: January-March earningsJune 15: April-May earningsSeptember 15: June-August earningsJanuary 15: September-December earnings

Prevention: Your Future Tax Strategy

Smart Recordkeeping Tips1. Track all income immediately2. Save 25%–30% for taxes3. Document business expenses4. Keep digital and physical receipts

DIY Option: Form 843

Want to handle it yourself? Here's what you need:Purpose: Request refund and penalty abatementDownload: IRS.gov Form 843Required documentation:

  •   - Canceled checks 
  •  - Correspondence

Why Turnout Makes a Difference

Experts in Your CornerOur seasoned professionals have years of proven experience to get you sorted and resolve your situation. As your trusted partner, we provide guidance, knowledge, and support to solve even the most complex matters effectively.

The Bottom Line for Your Business

Turnout’s expert advisors and integrated AI to solve your tax issues. Here’s how:

  • Fast resolution:
  • - Same-day tax analysis
  • - AI-powered review
  • - Expert verification
  • - Real-time tracking
  • Protection:
  • - Stop collections within 24 hours
  • - Reduce or eliminate penalties
  • - Navigate IRS programs
  • No surprises:
  • - Clear pricing upfront
  • - Regular progress updates
  • - Expert guidance throughout

Take Action NowGet Your Free Analysis →- Upload documents securely- See options in minutes- Stop penalties immediately- Start resolving today

Bottom Line

With penalties nearly tripled since 2021 and daily compounding interest, waiting to address tax issues costs more than ever. Turnout’s expert advisors and integrated AI to solve your matters.*Sources: Internal Revenue Service, "Gig Economy Tax Center," 2024; IRS Notice 2023-X; Wall Street Journal, "IRS Penalties Surge for Taxpayers Who Don't Pay Enough Throughout Year," 2023; New York Post, "IRS Underpayment Penalties Triple Since 2021," 2023*

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