💼 Started a side hustle? Read this before June.

Technically, yes. Practically, the answer is a little more complicated than that.

The cuts are real and significant. Through early 2025, the IRS lost about 31% of its revenue agents, roughly 3,600 auditors, through a combination of layoffs and voluntary departures. The agency’s overall headcount dropped by about 11%, with targets for a 40% reduction still on the table.

Audit rates for ordinary W-2 earners were already extremely low, well under 1% for most income levels. A smaller audit staff makes them even lower. If you’re a salaried employee with a straightforward return, your odds of hearing from an IRS examiner were slim before, and they’re slimmer now.

The cuts have disproportionately hit the divisions that handle wealthy individuals and corporations, the Global High Wealth unit, which audits the ultra-rich, has lost 38% of its staff. Many large, complex audits that began under the previous administration are reportedly being abandoned due to lack of staff. One policy analyst described it, colorfully, as “Christmas coming early” for tax cheats.

Automated notices (the CP letters, math error checks, and income matching) don’t require auditors. They’re generated by computers comparing your return against W-2s, 1099s, and other third-party data the IRS already has. That process is largely untouched. If you underreport income that was reported to the IRS by someone else, the algorithm will still find it.

Fewer auditors means fewer audits, especially for complex, high-dollar cases. For the average filer, the practical change is minimal. You were unlikely to be audited before, and you’re still unlikely to be audited now. File accurately. The computers are watching.

Whoever told you that was correct, and possibly doing you a significant favor.

The U.S. tax system is built on a pay-as-you-go model. When you work for an employer, they handle this quietly in the background, withholding a portion of every paycheck before it ever reaches you. When you work for yourself, no one does that. Which means the responsibility lands entirely on you, and the IRS expects you to stay current throughout the year rather than settling up in April like some kind of annual reckoning.

If you expect to owe $1,000 or more in federal taxes from your self-employment income, you’re generally required to make estimated quarterly payments. The threshold is lower than most people expect.

The 2026 due dates are:

The IRS charges an underpayment penalty, currently calculated at 6%. It’s not catastrophic, but it compounds quietly all year and shows up as an unpleasant surprise when you file.

Set aside 25–30% of every dollar your side hustle brings in. Self-employment tax alone runs 15.3% on top of your regular income tax rate. A tax professional can help you calculate a more precise number based on your total income picture.

Many side hustle expenses are deductible — equipment, software, a portion of your phone bill, mileage. The side hustle that looks profitable often looks less so once you factor in legitimate deductions.

Every Thursday, we go to work.

The TaxStache Business Edition breaks down the tax and finance topics that actually matter for business owners, from quick intros to full deep dives. Plus book, podcast, and video recs to keep you sharp, and a weekly download you can put to use right away.

If you own a business (or you’re building one), this one’s for you.

Most of the time, joint filing wins. But “most of the time” is doing a lot of work in that sentence, and there are real situations where Married Filing Separately is the smarter call. Let’s walk through both sides.

Married Filing Jointly gives you access to a wider tax bracket, a higher standard deduction ($32,200 for 2026), and eligibility for credits that disappear entirely if you file separately, including the Child Tax Credit, the Earned Income Credit, and education credits. For most couples with relatively similar income and straightforward returns, joint filing results in a lower combined tax bill. Sometimes significantly lower.

There are specific circumstances where filing separately can actually save money or protect you:

Running the actual numbers for both scenarios is the only way to know for sure. The math isn’t always intuitive, and the right answer is almost always specific to your income levels, deductions, and life situation. A tax professional can model both options quickly.