Nothing is more frustrating than expecting a tax refund and ending up with a surprise bill instead. If this has happened to you, your tax withholding may not be set up correctly. Fortunately, there are ways to avoid these surprises and take control of your tax situation.
Your W-4 determines how much tax is taken from your paycheck. If too little is withheld, you might owe money at tax time. Use the IRS Tax Withholding Estimator or consult an accountant to ensure you’re withholding the right amount.
Marriage, divorce, having a child, or getting a second job can change your tax situation. Updating your W-4 after these events helps ensure you’re not underpaying or overpaying taxes throughout the year.
If you work for yourself or have additional income from freelance work or investments, you may need to make estimated tax payments. These payments can help you prevent penalties and a large tax bill when the year ends.
Deductions from student loan interest, mortgage interest and retirement contributions can reduce your taxable income. Keeping records throughout the year can help you maximize deductions and reduce your tax bill.
Avoiding a surprise tax bill starts with proper planning. Regularly reviewing your tax withholding, adjusting it after life changes, and keeping track of deductions can make tax season stress-free. We can help you optimize your tax strategy and prevent any unwanted surprises.