As the end of the year approaches, you should consider a tax planning session. By checking now to make sure the right amount of tax is being withheld, you can avoid an unexpected tax bill next year.
Here are five examples of taxpayers who would benefit from a tax planning session:
• Did you receive a large refund last year? When you have too much tax withheld from your paycheck, you are letting the government use your money interest free. You can change your withholding to receive larger paychecks, rather than waiting for a bigger refund.
• Did you owe a large amount when you filed your taxes last year? If you haven’t withhold enough tax from your paycheck, you might owe money again this year. This can lead to an unexpectedly large bill at tax time, and possible penalties.
• Do you work a second job? Or drive for Uber or Lyft in your spare time? You should adjust the withholding on your paycheck(s) to make sure you’re paying in enough money. Part time jobs frequently don’t withhold enough tax, and people who work in the gig economy aren’t having taxes withheld at all.
• Did you make estimated tax payments? We estimate your tax payments at the beginning of the year, based on last year’s income. It’s a good idea to do a check now, when you have a better idea what your income for the year is going to look like. Your last payment can be adjusted accordingly.
• Did you start a new job? You should make sure that your withholding is enough to cover your new income.
Give us a call today to schedule a tax planning session. All of our clients are entitled to one half hour of free tax planning every year. We can estimate how much tax you will owe, see how much money you’ve paid toward that bill and make recommendations for the rest of the year. We can also help you fill out a new W-4 to give your employer, or show you how to make estimated payments, if you’ve never done it before. Nobody likes ugly surprises at tax time. Schedule your planning session today!