What to Do If You Want Your Tax Money For Use During the Tax Year

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Lavestia Gaston-Harper Tax Advice

If you don’t like the idea of a tax refund delay then  adjust your tax withholding for the rest of 2017, so you get more take-home money now and a smaller refund . Check out IRS tips on tax withholding and a withholding calculator. complete your W-4 by finding the right balance between holding too little (you’ll owe Uncle Sam at tax time) and holding too much (you’ll be due a refund, which you might have to wait for).

If you have income outside of wages and salary–Schedule C self-employment income, capital gains, interest and dividends–you need to pay estimated taxes in quarterly installments. (You don’t have to make estimated payments if your tax due—after subtracting withholding and credits–is less than $1,000).

Typically taxpayers who pay estimates use what’s known as the “prior year safe harbor.” That means they pay in 100% of the prior year’s tax as estimates (or 110% if their adjusted gross income was above $150,000). Using the 100%/110% prior year safe harbor is easy but in some case it means you’re overpaying.

The alternative rule–to avoid penalties for underpaying estimated tax payments—is to pay in 90% of your current year estimated tax.

Already in 2016, the IRS has issued more than 102 million tax refunds (out of 140 million individual returns), and the average refund is over $2,700. Most refunds will still be issued within 21 days or less, the IRS says. But remember those refunds will not start being distributed until after February 15, 2017.

Source: irs.gov

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