The stress of filing taxes before the deadline in April has come and gone. But were you surprised at how much you got back and did it leave you wondering if you wound up paying additional taxes instead of getting a refund?
Being on either end of the spectrum — massive refund or massive tax liability — isn’t a good place to be. If you found yourself in either of these camps you need to look at adjusting your tax withholding in order to close the gap between what you paid in tax and what you were supposed to pay.
Adjusting your paychecks for how much tax is taken out is done by making small adjustments to the withholdings on your Form W-4. These adjustments can be made at any point throughout the year and you can also adjust your withholdings as many times as you want. Taking these small steps to see how much extra tax is taken from your check (or isn’t, if you’re trying to reduce a massive refund) will enable you to balance your withholdings to your preferences.
Individual tax changes can be done on a smaller level than the Federal government. It is vital to be aware of your state tax withholding as well. You could give yourself a big monthly income boost by cutting your tax refunds in half from both the Federal and state governments and getting the extra cash each month instead.
JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.