Tax Season Ends
If you are one of the hundreds of people that wants to know nothing about taxes until next year, sorry but here is yet another tax related post. While for most people this tax season is over, some still have some stuff to do. If you ended up owing tax money to the IRS, here are your options.
You can always ask for an installment agreement, I’m sure that you know this by now if you ended up owing tax money. But there is a little bit more to do to prevent this from happening next year, planning your tax year is important and if your accountant missed to help you on this subject you should consider seeking help somewhere else.
The IRS general rule is:
You must pay estimated tax for 2008 if both of the following apply.
· You expect to owe at least $1,000 in tax for 2008, after subtracting your withholding and credits.
You expect your withholding and credits to be less than the smaller of:
· 90% of the tax to be shown on your 2008 tax return, or
· 100% of the tax shown on your 2007 tax return. Your 2007 tax return must cover all 12 months.
First thing to do is to inform yourself with what your responsibilities are, to put it in the lamest terms, if you owed more than $1,000.00 you have to do estimated payments during the year. Usually the IRS divide whatever you ended up paying by four, for example if you owed $1,000.00 you have to make quarterly estimated payments of $250.00.
There is a way of preventing this from happening all you have to do is update your W-4 with your employer, take out an exemption or even ask for more money to be taken out, the form provide for this type of request. Find links about all this information on this page, if you want to discuss further, leave a comment. I will be adding a forum soon, so stick around for that.
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