Love it or hate it, Tax Day is Coming
Tax Day is creeping up on all of us, and if you are one of the many people who find themselves in the unfortunate position of owing Uncle Sam, you are not alone. Thanks to the changes to the Child Tax Credit and Advance Payments, you may have to cough up more than you anticipated.
It’s safe to say that most of us have been surprised by a tax bill at some point. Until we have time-traveling capabilities, no one is going back to elect more withholdings. What you can do is make changes now that will reduce the chance of owing in the future. The rule of thumb is that if you have a significant life change, you should review your budget. The same holds true for tax withholdings. If you owed taxes last year or if you’ve had changes in your family the previous year are all signs that you should review and adjust your tax withholdings as necessary.
If you think you may still owe taxes, the IRS gives you the option to pay estimated taxes throughout the year. You can find more information about changing your withholdings and paying estimated taxes by clicking this IRS link to avoid owing taxes.
Talk to a Pro
If tax procedures confuse you, you’re in good company. When in doubt, make an appointment to talk to a tax expert who is trained to help you take full advantage of programs and benefits that can save you money. Ask them about lesser-known tax credits. If you still owe, they can advocate on your behalf to request leniency, payment plans, and even potentially waiving fees. Free tax programs are great, but if you’re facing a tax bill, it is probably best to pay a professional.
Do the Shuffle
Again, if we all had time machines, we would never have to worry about surprise bills. Plan ahead by stashing more funds into your 401(k), IRA, FSA, HSA, and 529 plans. This is another occasion where chatting with a tax professional can be very helpful as the IRS has rules in place for contributions and withdrawals.
Financing your Debt
Worried about coming up with a large amount of money before Tax Day? Contact the IRS about a short-term or long-term payment plan. You must enter into a plan agreement before 04/18/2022. Click here for more information.
Of course, you can always save yourself the headache of dealing with the IRS by applying for a Tax Loan. Our short-term loans feature a low, fixed rate, and we’ll make the payment to the IRS. Visit our website for more information or to apply.
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Krista Kyte is a personal finance blogger and personal banker with over 18 years of experience in the financial industry. Krista is passionate about helping our members understand their financial situations. She writes tips that help consumers reach and maintain financial security and start living the life they’ve always wanted.
