Why Do I Owe Federal Taxes?

This is a question asked by practically every American. Like why do you owe federal taxes? What did I do? Who did I wrong? Well, this article might answer this serious question. Let me give it a go, shall I? 

What are the reasons I’m told I owe Federal Taxes? 

Whenever you finish handling the tax returns, and you don’t understand why you need to send a cheque to the IRS, one of the only explanations is that you didn’t pay them completely the amount you owed them. The amount of tax you paid during the year was more than the actual amount you paid or the amount of your income level. This is why whenever you think you’re done, it always shocks you, and you wonder, “Why do I still Owe Federal Taxes.”

Other ways you might still owe federal taxes 

Starting in 2018, different exemptions occurred dependently on others, and they were not taken from your income. 

If you work for a firm, company, or organization, the IRS would need your employer to hold some of your salary used to pay your taxes. The number of funds held would depend on different factors. You have a lot of control over the number of funds that are collected from your pay. The W-4 form you filled when your job started allows you to modify how much tax you have from your paychecks. The essential news is that you could always fill out a brand new form whenever you desire. You could increase the amount taken from your income. This would help get rid of that nasty tax bill that accrues at the end of the year. 

If you are not familiar with what the W-4 form is all about, you need to understand the way allowances work before you go and make some adjustments. All allowance you report represents various reductions in your taxable income. Some of these include exemptions dependent on your amount of tax through periods before the year 2018. As you try to get your tax returned, more allowances reported on your form would state that a lower amount of tax has been held from your paycheck. If you report for a higher amount of allowances on your W-4, there are several dependents obtained from your tax return. You could later write a check whenever the IRS comes over in the future. This is simply an example. 

Several different scenarios using the W-4 calculator could test these using calculator available at TurboTax.com. 

My thoughts on the reasons you owe Federal Taxes 

Where I come from, we don’t have the normal tax-paying system. All tax forms are added to every and anything we purchase. It doesn’t matter what you purchase. You could purchase food seasoning, a bucket, a broom, and it wouldn’t matter. You still end up paying tax on that product. It is not fair, but this is the world we live in. We need to pay up and let it go.

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Tax Season is Around the Corner: Here’s How You Should Prepare

You could own your business, you could just be an employee, you could have hustles on the side, you could be an investor and you have a very high capital gain. You need to know that Tax Season is coming around. You need to prepare yourselves. This article is going to show you ways you can get yourself ready for this tax season.

If you are a payer of tax and you pay the IRS every quarter, you need to make your payment by September 16th.

Every year have their deadlines. If you do not want to attract a penalty from the IRS, you need to pay ninety percent at least of your income taxes. These taxes are paid annually. There’s also a hundred percent of the liability of the tax you pay. These are necessary from the year before for you to get rid of an underpayment penalty on your return of tax.

The threshold you could have is that of a hundred and ten percent. If you have gross income which gets adjusted and the return from that year passes a hundred and fifty thousand dollars.

As an employee, you would have your federal income taxes held from you through all your paychecks. These are also for self-employed individuals. They tend to pay all they owe by each quarter of the year.

These all mean that these people that pay taxes by the quarter need to settle and plan these payments properly in advance.

What Should I Do as the Tax Season Is Coming?

I so do not like owing debts. Tax whether we like it or not is a form of debt because the tax is the way the government gets funds to take care of the nation. It is other words exchanged by the government as government expenditure. This is what is used in the creation of good roads, traffic lights, payments on the salaries of essential workers, and all in between. So you need to pay your tax. Your tax needs to be kept and your books need to be organized in a manner that when the tax season comes. It would be very easy and simple for you, your company, your employees, and all you’re in contact with to pay their fines. It is all so simple. You need to plan everything though. Because if you do not plan, you would run into a lot of problems when the tax collectors should come knocking at your door.

What Happens to Me If I’m Not Prepared When the Tax Collectors Come Knocking?

You can politely with peace and grace ask for an extension. Make these tax collectors feel welcomed and comfortable in your office or where you work or where they need to see you and get your tax. But if you’re rude to them, that would be very sad for you. You should just simply beg them, kindly for more time.

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