Every year, many people get tax refunds back. Understandably, it can be surprising if you go from getting a tax refund back to having to pay the IRS, instead. This is especially true if you haven't changed your salary. What exactly controls whether you get a tax refund?
Tax Withholding: Why You Often Get a Refund
With every paycheck, your employer deducts a certain amount of tax and pays this. This is an estimated amount of how much you owe, based on the number of dependents you have.
As the year winds down, it is time not only to get ready for the holiday season and sales, but it is time to wrap up your finances and reflect on the last year as a small business owner. This is the time to make last-minute decisions that will impact your taxes and reflect on your financial success.
#1 Purchase Needed Equipment
If you want to maximize your business deductions, this is a great time to review what needs your business has.
When you owe the IRS some money, you need to be sure that you do everything that you can to right this situation. This is not a creditor that you will want to have for any longer than necessary, so to prevent this from being the case, make sure that you follow a few solid tips. Start with these tips below so that you can alleviate this burden and get this debt off of your back.
Having to pay taxes instead of getting money back is always stressful, but it happens most of the time. For this reason, you will want to know what you can do to reduce the amount you owe. Here are five tips for doing this:
Change Withholding Amount: One thing you can do is go to your employer to change the amount that you pay in taxes with each paycheck. This is the withheld amount and the higher it is, the less you will pay when it comes to tax day because you will have already made a good amount of tax payments throughout the year.
Your financial planner may have recommended a trust as a tool for your estate planning so that you can protect the value of your assets. However, if you're not familiar with how trusts work, it can be easy to make mistakes that could lead to hardships and confusion for your beneficiaries. Be sure to use these three directives to ensure that a trust works well for those that you plan to share your estate with after you pass away.