Americans in recent years have become addicted to receiving their refund from the IRS, which for many of them is a way of forcing themselves to save money. Unfortunately by allowing the federal government to hang onto money that you are due for extended weeks or months, by not adjusting your tax withholding status you are actually allowing the federal government to borrow money from you for free at no interest.
It is not exclusive to the end of the year, but everyone should always consider adjusting their tax withholding status to match their taxable income. Take the time to use a tax withholding calculator to gain a tough estimate of how much you might owe in taxes, especially tax liability for Social Security and Medicare if you are self-employed, to minimize the amount you owe.
Unwilling to bravely calculate your own estimates with the IRS’s federal tax tables? Contact us today at 407.892.1066.