In your 20s, most tax debt starts small: a side gig with no tax taken out, or a W-4 that withholds too little. Fix it early, before penalties and interest pile up.
Your first jobs come with a Form W-4. If it is off, too little tax comes out and you owe in April.
Side gigs are taxable even with no form. Once your net self employment earnings hit $400, you owe self employment tax too.
Not filing makes it worse. The late filing penalty is 5% of the unpaid tax for each month, up to 25%.
Steps that help
- Run the IRS withholding estimator after any new job.
- Set aside part of every side gig payment.
- File on time even if you cannot pay.
- Keep your W-2s and 1099s in one place.
Help that may fit
Results depend on your situation. Not every case qualifies.
Common questions
I owe the IRS and I am 22. What now?
File any missing returns first. Then look at a payment plan. The IRS has short and long term plans with set fees.
Can I get help if I already owe?
Yes. A tax pro can look at payment plans, penalty relief and other options for your case. Results depend on your situation. Not every case qualifies.