October 2, 2024
Even before Labor Day, the IRS issued an advisory memo encouraging taxpayers to consider using the end of the summer to make tax withholding or payment updates to avoid a potential surprise next year at tax time.
Said the IRS: "While most taxpayers get a refund after filing their taxes, many also find they unexpectedly owe taxes. This can be due to a life or job change for which they did not make the necessary tax adjustment during the year."
According to the IRS, those who should be especially careful are:
The IRS suggests that those individuals in particular should check the amount they pay, or the amount of tax they have withheld throughout the year, to bring the tax they pay closer to what is owed. Your best bet is to talk to your tax professional now and not wait until the last minute. Indeed, the IRS reminds taxpayers that tax planning done now can save time and frustration later.
According to the IRS, many taxpayers end up with estimated tax penalties because they underpay throughout the year. The penalty amount varies but for some it can be several hundred dollars. Adjusting withholding on paychecks or the amount of estimated tax payments can help prevent penalties. This is especially important for self-employed people, including those in the gig economy, those with more than one job and those with major changes in their life, like a recent marriage or a new child.
Wise taxpayers will contact their tax professionals now, to avoid last-minute problems as the due date approaches. Please consult with one of our Larson tax advisers for more information. Larson and Company has developed a suite of services specifically to serve the needs of companies of all sizes in a wide range of industries.
Source: Industry Newsletters ©2024