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Too Much, Too Little, Too Late: IRS Encourages Taxpayers to Check Withholding

Tax Resolution Software

It goes without saying TOO LATE is a major problem with the IRS. TOO MUCH and TOO LITTLE are also issues worthy of consideration.

 

The IRS is also asking taxpayers to review paycheck withholdings, keeping in mind there are factors that could affect either refunds or taxes owed in 2018. The goal is to have the appropriate amount withheld. This moves taxpayers closer to a zero balance when they file returns at the end of the year. In other words, no taxes owed and no refund due.

 

Exemptions, Adjustments & Credits

The only thing that’s certain is change, and that includes a taxpayer’s life. These changes can impact exemptions, adjustments or credits.  For instance, changes in marital status require an employee to give an employer a new W-4 form to change withholding status and/or number of allowances.

 

Employers use the form to calculate federal income tax withholdings from an employee’s paycheck. Doing so in late summer, or even early fall is advantageous as it gives the taxpayer time to make adjustments before the end of the tax year.

 

IRS Requirement

Federal law now requires the IRS to hold refunds a few weeks for some early filers claiming Earned Income Credit, making these adjustments even more important. The same goes for the Additional Child Credit. And there is also an additional concern brought about in recent times.

 

Tax Fraud Prevention

The IRS and State Tax Administrators are now taking steps to strengthen protections against identity theft and refund fraud. What this means is some tax returns could face an additional review next year.

 

To help taxpayers bring taxes paid closer to taxes owed, the IRS offers several online resources. They are available 24/7 at IRS.gov.

 

They include:

 

The more services you offer your clients, the more likely they are to return and refer. Pick up our FREE Pricing Guide today and begin strengthening relationships and generating more income year round.

 

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