DIAGNOSIS The automatic or manual cut setting is off because the machine doesn't know where the label ends. It's a calibration issue between the software and the hardware feed.
FIX For the most accurate cuts, use cut mode. In the Phomemo app, when designing your label, look for the cut option (often a scissors icon). Set it to "Manual Cut" or "Cut Manually." Print your label. The machine will print the label and then feed it out, stopping with the label past the cutter. You then press the physical feed button (the one with the arrow) to advance the label millimeter by millimeter until the cut line is exactly where you want it, then press the cut button.
IF THAT DIDN'T WORK Check for a firmware update in the Phomemo app. Sometimes updates improve cut accuracy. Also, ensure you've selected the correct tape width in the app's settings for the cartridge you have installed—if it thinks it's 12mm but you have 9mm in, the math will be wrong.
HEADS UP The automatic cut function is never going to be perfect for very short labels. It's best for longer, continuous labels. For precise, short tags, manual mode is your friend. It takes an extra second but saves tape and frustration.