Life events can have a considerable impact on your taxes. Summer is a good time to review your situation and make adjustments to avoid unwanted surprises next spring.
Here are four life events that will impact your tax situation:
- Withholding amount – You complete a new Form W-4 with your employer each year. Look at the amount of tax withheld to date on your most current paystub and determine if you are withholding enough to meet your tax obligations. The IRS withholding calculator will help you determine whether you are withholding too much or too little from your paycheck.
- Estimated tax due – Income from self-employment, rent collected, interest, and dividends is subject to tax which is typically paid quarterly. Be sure you have paid enough in estimated tax.
- Life events – Life changes such as marriage or divorce, birth of a child, or buying a new home create changes in the amount taxes you will owe. The IRS withholding calculator will help you determine the proper number of allowances.
- Deductions – Keep track of tax deductions year-to-date to help you plan for the balance of the year. Learn more about deductions from the IRS Deduction FAQs.
A Salmon Sims Thomas tax advisor is available all year long to talk about the best ways to prepare for or minimize your tax burden.