Now that we are barreling through July and well into the second half of 2013 perhaps you might benefit from a quick mid-year look at your taxes. No, really.
The majority of taxpayers get a refund every year and this year is no different as more than three of four taxpayers are getting refunds. On the other hand, you (presumably) do not want an unwelcome surprise of having a balance due when you file in 2014. Keep in mind that a tax refund is really your money that is being refunded to you after you file your taxes. So what to do to bring the taxes you pay closer to what is actually owed?
Visit IRS.gov and check out our handy Withholding Calculator tool. Spend a few minutes and it can help you determine whether you need to give your employer a new Form W-4, Employee's Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay. You can use your results from the calculator to help fill out the form.
Our federal income tax system is a pay-as-you-go tax system and so you normally must pay tax as you earn or receive income during the year. This is done either through tax withholding from your paycheck(s) or from making quarterly estimated tax payments if, for example, you are self-employed.
For complete information on taxes, paying estimated taxes and tax withholdings, IRS Publication 505, available at http://www.irs.gov/pub505 is an excellent resurce. Also, take a look at our YouTube video on paying estimated taxes for more.
