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Posted on 04/13/2026 1:15:13 PM PDT by Libloather
Nobody really budgets for a financial car crash in April. But that’s exactly what millions of Americans are dealing with this year.
Instead of the refund they were counting on to finally pay off Christmas gifts or fund a summer trip, tax season 2026 is handing them a bill. And for a lot of people, it’s not a small one. It’s the kind of bill that makes you want to throw your laptop out a window.
The reasons aren’t actually that complicated – the government practically set a trap for anyone with a side hustle.
Between confusing tax law changes, gig apps that don’t explain the math and a totally broken approach to payroll withholding, it all came due this spring. It’s why so many people are staring at an unexpected tax bill for 2025 taxes and asking, “How did this happen?”
If you’re looking at a 2026 IRS surprise bill reason that doesn’t make sense, you’re not alone. Tax resolution experts, like those at TaxRise, say their phones haven’t stopped ringing since February with people asking the exact same question. Let me show you what actually went wrong.
Yes. But the way it’s doing it this year is infuriating.
For years, selling stuff on Etsy or splitting bills on Venmo was basically off the IRS’s radar. Then Congress spent nearly four years threatening to lower the 1099-K reporting threshold to just $600. Everyone panicked.
Then, at the absolute last minute in July 2025, they signed the One Big Beautiful Bill Act (OBBBA), rolling back the federal threshold back up to $20,000 and 200 transactions.
So we’re safe, right?
Wrong. Because half the states out there ignored Congress and kept their own state-level limits at $600 anyway. Maryland, Massachusetts, Montana, North Caroline, Vermont, Virginia and the District of Columbia are...
(Excerpt) Read more at nypost.com ...
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The ones I despise are those who eat steak on my tax dollars.
From the nature of the economy they’re trying to capture, the cost of enforcement is liable to exceed the revenue.
The ironic thing is that most of the elderly folks I know are getting a surprise tax refund this year thanks to the Big Beautiful Thing.
Whatever is income producing should be viewed as potentially subject to income tax. This should not surprise people. The article makes it sound like a sneak attack, when it has everything to do with the taxpayer being aware of what constitutes income.
Another new reason to scrap the whole tax code and go to a simple one-size-fits-all universal flat tax of 10% with no exemptions, no deductions, no exclusions and no credits - just a flat 10% of whatever earnings you had and that’s it. Everyone pays the same rate and all the tax accountants go look for new jobs.
Got my refund a week after filing.
So these "millions of Americans" in the headline are really a select group of people who got whacked by their states, not the feds, or by neglecting to update their personal deduction status on their W-4????
The whole story is TDS by mis-representation. Once again a headline reader agenda trap by the media.
So all the BLUE states ignored the higher $20K/200 transactions for taxation? Figures.
Taxation is THEFT. Inflation is THEFT. Plan accordingly.
I am one of them. Instead of owing 14k, I only owed 6k. It was a pleasant surprise.
“So all the BLUE states ignored the higher $20K/200 transactions for taxation?”
and Montana, Missouri, North Carolina.
From what I am hearing, AI is the driving force behind the IRS (short for Infernal Revenue Service) crackdown on citizens trying to survive. The IRS has supposedly spent millions on this crackdown, and good luck to anyone who gets caught in their trap. As always with the IRS, you are guilty unless you can prove your innocence. Add into the mix the possibly, or even probability, that AI will create a crime out of thin air to pin on you.
“”””If you want to fix this so it doesn’t happen again, you have to do the boring stuff.
How to fix withholding after side job income? Go to your HR department tomorrow. Update your W-4. Tell them to withhold an extra $50 a paycheck. You’ll barely feel it on payday, but you will definitely notice it come April.
Quarterly estimated tax payments? If you gig, pay the IRS four times a year. April, June, September, January. Send them something. This is non-negotiable.
Track your expenses. Save your receipts. The era of the honor system is over, and the IRS only rewards those who show up with receipts. The IRS algorithms are too good, the gig-economy underpayment IRS penalty is too steep, and the government wants its money.””””
This story is nothing more than a bunch of whining by people who do not keep themselves informed on what the tax laws are.
For those people who are self-employed and do not keep accurate records, then it is just ‘tough’ when you get dinged when you file your tax return.
I don’t know what is worser,
The ones paying tax on a rate that does not cover their tax liability and then complain about their filing
Or
The ones not working to pay any tax liability being compensated by freebees that they expect receive and yet complain???
I for one would like to feel good about what my hard earned money goes to not the likes of leering centers or timmy walsherys
This only effects people that sell items with other then cash. Use cash. Probably moving out of those states would be good if that tax would be great. How bad can a state be on what you personally sell.?
This is why some politicians want to eliminate cash altogether, and make every transaction electronic.
Bend over, here it comes...
I bleed
You’re correct. We have adjusted our withholding so that we either get a very small refund or make a very small payment. I think we paid Feds $500 this year and got a state refund of about $300.
Maryland also doesn’t recognize the larger Federal standard deduction. You can’t split it to do standard for Feds and itemize for the State.
We do taxes both ways to see which is more beneficial for us and not for the almighty state. I think we always end up itemizing.
Just did a tax return where the woman must repay her Obamacare $8,500 Healthcare Premium Credit. That form (8962) is the worst nightmare. The instructions to complete the form are 24 pages and they keep referring to the IRS publication that is 64 pages. It’s nonsensical to read, as though it were written by an art major.
I hate taxes as much as anyone, but I’m smart enough to know what I’m liable for and adjust accordingly. Do gig workers and Etsy sellers think the IRS is going to let them slide out of the kindness of their flinty hearts?
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