There are moments when I still cannot quite believe it is already November. We are rapidly moving toward the holiday season, and soon thereafter we can start to celebrate the tax season.
Granted, no one else really celebrates that, and I don’t fault anyone who completely hides from it. Heck, even those who expect a refund enjoy the endpoint, but are not huge fans of the paperwork and reporting before that money hits the bank. And clearly, those who will have to pay to satisfy their tax obligation look toward it even less.
The fact that no one looks forward to it means that many do not think about taxes until they have to. Unfortunately, this avoidance of the subject could mean that the eventual tax hit is worse than it needs to be. A little more mindfulness, and a little more planning, helps one keep a tax bill as low as possible. At this point, though, there are less than two months left in the year, meaning one’s options are getting more limited, but it’s not too late to still make a difference.
So to start, if you are worried about how things may look come next year, please don’t hesitate to contact us and make an appointment for planning purposes. We can look at some numbers, make some estimates, and do what we can to prepare you for filing season.
For those who aren’t worried, though, and just want to start putting the picture together, the IRS has some tools you can use to do that. A good place to start for all is Form 1040-ES, which you can use to figure out what you should be making in estimated tax payments, and then carry through and pay some, as well. This could be an especially important piece for self-employed individuals, who not only have to pay their income tax, but the self-employment tax.
For those who receive a regular paycheck, though, you may want to visit the IRS’s withholding calculator There you can find out if you’re withholding enough from your paychecks to have your tax bill taken care of. And if it’s not (or if you find out you’re getting much more taken out of your check than you need), you can fill out a new Form W-4, submit it to the appropriate payroll people at your job and have the proper adjustments made.
Such actions may be (or I suppose, should be) more prevalent than in past years, for as more people start to participate in the sharing economy, there will be more people receiving income that is not being taxed. It could serve you well to start addressing that before actually filling out a tax return.
Overall, if you were happy with how things turned out when you filed taxes last year and nothing significant has happened to change your personal or financial pictures, you can let these things go and all should remain pretty similar when the calendar turns and it is time to file again. I know there are some of you, however, who were not happy, absorbed the blow, and then forgot about it. So why not make things a little easier on yourself this time while you still can?
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