Zane Johnson Shares Tips for Tax Season on Evening WURDs
Attorney Zane Johnson, Founder and Managing Attorney of MZA Legal, joined guest host P.O.C. on WURD Radio’s Evening WURDs radio show on February 20, 2024. Zane shared his tips for entrepreneurs, freelancers, and gig-workers when it comes to successfully navigating tax season. Here’s a quick summary of what he shared.
What are some tips you can share with the listening audience when it comes to tax season?
- Make sure you have a professional who you can turn to for personalized tax advice. Taxes can be tricky. At the end of the day, not only do you want to make sure you’re not making any mistakes that could get you in trouble, but you also want to make sure you’re holding on to as much of your money as legally possible.
- Pay your taxes on time. Even if you file for a tax extension until October, you’re still required to pay your estimated taxes in April. If you don’t, you may be subject to interest and penalties on any outstanding amount that’s left unpaid.
- Maintain accurate financial records for your business throughout the year. Whether you’re using a spreadsheet or bookkeeping software, keeping up to date financial records makes tax preparation much easier.
What tips would you share with gig workers specifically?
Understand that your tax responsibilities as a gig worker are different than they would be if you were an employee. As an employee, your employer withholds money from each paycheck and sends it to the government to cover your tax liabilities.
As a gig-worker or freelancer, the companies that you’re working with aren’t responsible for withholding any of your taxes. Which means, you are responsible for paying that entire amount. Many first time gig workers are surprised to learn that they owe taxes at the end of the year, instead of receiving the refund that they’re used to.
If you end up in this position, make a note for next year, and save a percentage of your earnings throughout the year to put towards your taxes when they’re due.
What’s the difference between receiving a tax refund in April and having to pay taxes?
Receiving a refund means that you had a tax overpayment throughout the year. So essentially, you gave the government an interest free loan, and now they’re paying you back. A lot of people enjoy getting a refund check during tax season. If that’s the case, leave things the way they are. However, if you would prefer to pay less in taxes throughout the year, adjust how much of your check is going to the government each pay period.
On the flip side, owing taxes in April means that you had a tax underpayment throughout the year. Therefore, you’re required to pay the remaining amount that you should have paid throughout the year.
This was Zane’s second appearance on WURD, with the first appearance being on Daybreak in 2019. To listen to his most recent interview on WURD in full, click here.
About MZA Legal
MZA Legal is a Black-owned, virtual law firm helping professionals ease into entrepreneurship. We provide small business solutions designed to help you build a solid foundation for the growth of your business. Our services include LLC Formation, Trademark Registration, and our On-Demand Legal Subscription services (coming soon!). For more information on our services, visit https://mza.legal/legal-solutions/.
About Zane
Zane is the Founder and Managing Attorney of MZA Legal. His professional goal is to help everyday people do extraordinary things. Zane lives in Hawaii with his wife Elizabeth. When he’s not running the firm, he’s running around after his two boys, Mekhai and Jett. In addition to being a lawyer, Zane moonlights as a wedding officiant. You can keep up with Zane by joining MZA Legal’s email list. For media inquiries or speaking engagements, reach out to hello@mza.legal.