George Kamel: 6 Reasons You Paid More Taxes This Year (and What You Can Do About It)
Written by
Ashley Donohoe
Edited by
Jenna Klaverweiden
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During tax season, you probably expect to owe nothing extra or even receive a nice refund that helps you catch up financially. But if you were unlucky when you filed your 2024 tax return, you might have gotten a surprise IRS tax bill that left you wondering what happened.
In a recent YouTube video, George Kamel discussed six reasons you might have owed more taxes this year. He also spoke with tax lawyer Jasmine DiLucci about ways to avoid shortages next time.
Income Changes
A bigger tax bill often comes from changes to your income. A raise or promotion may have led to a higher tax rate. Or you might have joined the roughly 8.9 million Americans who worked multiple jobs, as reported by the U.S. Bureau of Labor Statistics.
These situations can lead to your employer not taking enough taxes out of your pay. Both Kamel and DiLucci recommended going to your employee portal or asking HR about updating your Form W-4, which asks questions about your tax situation and lets you adjust how much money is withheld. You can also use the IRS tax withholding estimator to figure out the right amount.
When you update your Form W-4, keep in mind that Kamel advised aiming to have a tax balance of zero. While they’re a nice surprise, refunds aren’t necessarily a good thing for your money.
“If you’re getting a refund, it’s because you’ve been overpaying and essentially loaning your money to the government interest-free,” he said.
Tax Deduction and Credit Changes
Losing tax breaks or qualifying for lower amounts can cut into your refund or leave you owing money. Kamel gave the example of Child Tax Credit, which was $3,600 for children under 5 in 2021 compared with $2,000 in 2024.
Other scenarios include losing education credits if you completed school, getting a smaller Earned Income Tax Credit because your income went up or not qualifying for the Saver’s Credit if you didn’t contribute to your retirement account.
While you can’t do much about some lost or reduced tax perks, Kamel and DiLucci discussed how deciding between an itemized and standard deduction is important for saving money. DiLucci said the standard deduction is usually better unless you’ve got high mortgage interest and/or high charitable deductions.
Big Life Events
“If you got married or divorced, both of those things can change your filing status and your taxable income, and if you sold your home, you may owe taxes depending on how long you lived in the house, your profit from the sale and your filing status,” Kamel said.
If you stop qualifying for the married filing jointly status, your standard deduction is smaller, and you could find yourself in a higher tax bracket. But if you have a qualifying child, check if you can file as head of household since this is more favorable than filing single.
Before future property sales, check the IRS rules on capital gains taxes. Meeting certain requirements can exempt up to $500,000 of your house’s profit from those taxes.
Underestimated Self-Employment Taxes
DiLucci said some people aren’t aware that there’s a $400 threshold for self-employment taxes or that this type of income is reportable. Since it’s your job to pay taxes on self-employment earnings, a big tax bill is possible if you don’t follow the rules.
“To avoid any potential penalties and fees, it’s best to just pay it quarterly through the IRS website,” Kamel said. Even if it’s just a small side hustle, track all your earnings and expenses and use Form 1040-ES to figure out what to pay the IRS each quarter.
Investment Account Withdrawals
According to Kamel, taking money out of a traditional retirement account could also cause a larger tax bill. “This would be now taxed as income,” he said.
And if you have a regular brokerage account, taxes on gains might have increased your 2024 tax bill. The impact can be bigger if those investments were less than a year old; normal income tax rates rather than lower long-term capital gains rates would apply.
It’s smart to speak to a tax expert or investment advisor who can help you time withdrawals and sales and find other ways to lower your investment taxes.
Mistakes
Tax mistakes do legitimately happen. Maybe you typed the wrong income amount or forgot an eligible tax credit or deduction.
DiLucci also mentioned that transactions on platforms like Venmo can lead to a 1099-K issuance and an unexpected tax bills if the money is assumed to be income. DiLucci explained that if it’s not income, you’ll need to disclose that. “You actually need to typically report it on your return, reverse it out and disclose that it’s not income. Otherwise, the IRS will put it on your return as income,” she said.
Looking into tax rules, double-checking everything and working with a tax professional can help you avoid costly troubles.
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Sources
- George Kamel, “Why You Paid More Taxes This Year (And What To Do About It)“
- U.S. Bureau of Labor Statistics, “The Employment Situation — April 2025.”
