Paying less in taxes in 2023

[Pam K]

In 2022, I started working a side gig with a dog-sitting service (Rover) in addition to my regular job. I also received a bonus and a raise at my regular job. The end result was that I owed almost $1,000 in taxes for 2022. Rover does not withhold taxes, so I'm sure some of what I had to pay was due to Rover, but I only made $3,000 total for the year with Rover, so I'm assuming I must have too many deductions on my W-4 with my regular job. (I"m trying to find a copy of my W-4 to see how many deductions I am taking.) This year, I am still working Rover as a side gig, and I will likely make closer to $6,000 from that, plus I start a new job in mid-June that pays more money than my old job. When I fill out the W-4 for the new job, what should I do to ensure I am not paying even more in taxes for this year? 

FYI: I'm single with no children.

[awatkins2]

Hi, this is a very good question. You should 1st try to figure out how much in taxes you will actually owe. The first thing you should do is use a tax estimator, here is a good one to use: https://turbotax.intuit.com/tax-tools/calculators/w4/  You can also read all about how to estimate your withholding here: https://turbotax.intuit.com/tax-tips/irs-tax-forms/how-to-estimate-federal-withholding/L99CO0yTK  . If you do not do it this way you will probably have a large tax bill to pay with your tax return and can even incur penalties and interest so please be careful with your withholding.   Instead of paying estimated taxes on your Rover Income, you can ask your employer to withhold additional amounts from your W-2 income once you estimate how much your tax will be on your Rover income just break that amount up per your remaining paychecks to come up with the number of additional withholding to add to W-4.

[Pam K]

Thank you!

A few more questions:

When you mention asking my new employer to withhold additional amounts from my W-2 income, would I do that in Question 4c on the W-4 form? 

On the W-4, there's a place to determine withholdings if you hold more than one job. Since Rover is a side gig, do I actually count that as a second job even though I won't fill out a W-4 for Rover? Or I see in Step 4a that I could include Rover income there perhaps? 

Thanks!

[BonnieI]

Hi @Pam K  Thanks for reaching out today.  To answer your questions 'yes' your would enter the additional amount to withhold each pay period from your paycheck on Form W4 Line 4(c).  

Please use the useful tools with the link below to estimate your withholding & tax bracket for 2023.

W-4 Calculator | IRS Tax Withholding Calculator 2023-2024 | TurboTax

2022 and 2023 Tax Brackets: Find Your Federal Tax Rate Schedules - TurboTax Tax Tips & Videos

Hope this is useful information.