Tax season can be a time of great anticipation for millions of Americans who dream of a big refund check. However, this year many people have been surprised to find out that instead of a refund, they received an unexpected tax bill from Uncle Sam.
As a result of recent tax legislation changes and updated employer withholding tables, taxpayers are left scrambling to figure out how to pay their new IRS obligations due at filing time.
If you are worried about an impending tax bill, there are measures you can take to avoid an expensive increase in your tax liability. From budgeting tips to what to do when the worst happens, these strategies will have your wallet breathing easy throughout the year!
3 Steps to Take to Avoid Expensive Tax Bill
1. The Sooner You Find Out About Your Tax Bill, The Better!
Ignoring your IRS debt could have dire implications in the end. It is in your best interest to be aware of any outstanding amounts as soon as possible. This allows you to have sufficient time for tax planning and to secure the necessary funds.
It’s always a good idea to stay informed about your tax situation throughout the year and to file your taxes as soon as possible. This will give you an early estimate of your tax bill and allow you to plan and prepare accordingly. Doing so makes you less likely to incur penalties and interest charges.
2. Keep Track of Your Paycheck
The recent changes in tax law have resulted in some paychecks increase, but don’t get too excited. This could result in a smaller refund or an unexpected bill when you file. Stay informed and plan ahead so unpleasant surprises do not hound you this filing season.
To get ready for tax season, it’s important that you keep an eye on your paycheck. This is to ensure that the correct amount is being withheld. If you notice a drop in federal taxes deducted from your paycheck, notify your employer promptly, even if it means taking home less money each month. This can save you from future federal and state tax obligations and penalties!
3. Run Your Numbers Ahead
With your last paycheck from last year and a few other details, you can get an idea of what kind of tax refund or balance you can expect when it’s time to file. It’s better to take the time to get ready now, so there aren’t any nasty surprises later. However, please note that you should never use your final paycheck from 2022 to prepare your tax return. A valid W-2 form from your employer is necessary for a complete and accurate tax return.
To prepare for tax season, gather all records of your income, deductions, and credits to estimate your tax liability. With these numbers in hand, you can use reliable tax preparation software or a regular everyday calculator to understand your financial situation better.
What To Do When You Have Back Taxes or Know You Will Owe A Lot?
Never Ignore Your Tax Bill
Ignoring your tax bill is simply not an option. The IRS will never stop trying to collect back taxes owed to them. You can avoid further financial difficulties by settling the matter as soon as possible. It might strain your wallet now, but if left unresolved, it will rip huge chunks out of your future!
Get Help from Tax Experts
Dealing with the IRS can be an extremely stressful experience for many taxpayers. Even contacting the IRS via phone is practically impossible these days. Trying to solve your own tax problem without the right information and help from an expert is like going to court without a lawyer—not a smart move.
Our experienced team knows the “ins and outs” of the IRS, knows how to navigate the IRS maze, and is here to help you discover the best resolution for your specific circumstance. Take advantage of our knowledge and expertise by scheduling a consultation with us today – take charge of your taxes, and your life, before they become unmanageable!