With the IRS noting a decrease in tax refunds by about 29% compared to previous years, the quick assumption might be changing tax laws. However, tax legislation has remained stable since 2018. The real issue lies in the incorrect filling out of W-4 forms, leading to lower withholdings and, subsequently, smaller refunds. This mistake underscores the importance of accurate tax planning.
Many view their tax refund as a forced savings account, which, while beneficial for some, essentially amounts to an interest-free loan to the government. Utilizing tools like the IRS tax withholding estimator can help you align your withholdings with your actual tax liability. Additionally, being proactive with your tax strategy, such as regular checks and adjustments to your withholdings, can prevent unwelcome surprises at tax time.
For those navigating through S-corp income and W-2 withholdings, understanding how to blend these incomes for tax purposes can make a significant difference in your financial planning. Remember, the goal is to avoid tax surprises by being one step ahead.
Maximize your tax strategy and stay ahead of surprises. For personalized guidance, contact Verity CPAs at info@verity.cpa or 808.546.5026. Let's navigate your tax planning together for a smoother financial journey.
Comentários