To help taxpayers avoid a surprise at tax time next year, the IRS encouraged them to make tax withholding or payment updates now.

The IRS suggested this step because many taxpayers unexpectedly find that they owe taxes when they file. The reason why they may owe taxes could be a life change for which they did not make the necessary tax adjustment during the year. Such a life change could include a new job or major income change, marriage, childbirth or adoption, or a new home purchase.

Correct tax adjustments are of particular concern for gig economy workers, those with a side hustle, and anyone earning income not subject to withholding, the IRS warned. The agency provided a link to its Tax Withholding Estimator to help taxpayers align their tax withholding or tax payments with what they owe.

While recent IRS statistics showed that two-thirds of taxpayers have received a refund so far in 2024, many taxpayers ended up with estimated tax penalties because they underpaid throughout the year. Adjusting withholding on paychecks or the amount of estimated tax payments can help prevent penalties, and the Estimator can help people figure the amount of federal income tax they should pay during the year. The Estimator can also help people compute their federal income tax withholding; see how a refund, take-home pay or tax due are affected by withholding amounts; and choose an estimated withholding amount that works for taxpayers and their family.

While the Estimator works for most taxpayers, people with more complex tax situations should instead use the instructions in Publication 505, Tax Withholding and Estimated Tax. This includes taxpayers who owe Alternative Minimum Tax (AMT) or certain other taxes, and people with long-term capital gains or qualified dividends.

The IRS also urges taxpayers to revisit their tax withholding by visiting its Paycheck Checkup page.