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If you’ve been with the same employer for a number of years, you may not even remember setting up the number of allowances you wanted your employer to figure when calculating how much tax to withhold from your paycheck. The form you filled out is called a W-4. There’s a good chance that your situation may have changed since you first filled out that form, so it’s a good idea to re-evaluate your situation each year to determine whether you should adjust your withholding. If any of the following scenarios apply to you, you may want to reevaluate your withholding by submitting a new W-4 to your employer so they can adjust the amount of tax they are withholding.
Keep in mind that you can change the number of allowances you claim on your W-4 at any time during the year, however the later in the year you do so, the less impact it will have on the amount of tax that your employer withholds. Ideally, you should claim the number of exemptions that allow you to have enough tax withheld from your paycheck over the course of the year so that you neither owe tax, nor are due a refund when tax time rolls around.
To determine the optimum number of exemptions for your situation, you can use the Withholding Calculator on the IRS website. If any of the above scenarios apply, you can read more detailed information on how to adjust your withholding by referring to IRS Publication 919. If you still have questions, you may want to consult a tax professional or the IRS. The IRS provides free tax help by telephone, in person, or via the Internet. For more details, go to http://www.irs.gov.
*This is not intended to be, and is not tax advice. It is always wise to check with a tax professional if you have any questions before filing your taxes.
In today’s challenging financial times, it’s crucial not to miss any opportunity to save money – especially on your taxes, since they can be a significant expense. In this article, we’ve listed some deductions that could be easy to overlook.
1. You May Be Able to Negotiate a Lower Amount If You Owe Back Taxes – Although the IRS is aggressive in its collection efforts, it does acknowledge on its website that if you do not have the ability to pay your back taxes in full, you may be eligible to settle for a lesser amount through an Offer in Compromise. 2. They Don’t Want To Seize Your Assets – Usually it’s too expensive to seize your physical property and hold a public auction, unless there are large sums of money involved and expensive property. But you still don’t want to be delinquent, because it’s relatively easy for them to seize a bank account or garnish wages, and they will if you are in default on your taxes and don’t work out a payment arrangement with them. 3. They Don’t Want to Take You to Court – A trial is relatively expensive so they will probably try to exhaust all avenues and be open to a settlement before going to court. If you have a dispute, there is an appeals process designed to resolve tax controversies without litigation. Remember though, the law is on the side of the IRS if you are at fault. 4. Their Agents Can Make Mistakes – The IRS is not infallible and when you are dealing with lots of numbers there’s always going to be mistakes. If you are convinced that they made the error, not you, file a complaint. 5. You Need to be Persistent and Organized – The IRS is a huge bureaucracy serving hundreds of millions of taxpayers, so don’t expect them to cater to you with outstanding personal service. If you have an issue, it pays to document as much as possible to support your case. And pay attention to dates and deadlines, because once they notify you of a hearing, etc. they aren’t going to send you friendly reminders, it’s up to you to be there. Note: This is not to be construed as tax or legal advice. If you have questions concerning your situation, you should consult with your tax and/or legal advisor. There may be additional information that you can use on the IRS website.
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