Most individuals are already switching to a summer mindset of delicious piña coladas and summer vacations automatically push taxes to the back of their minds. Tax planning isn’t a once-a-year activity. In fact, thoughtful planning year-round can help you reduce your tax liabilities come April.
Additionally, summer is a great time to review withholdings and see if summer plans would affect next year’s tax return. Life events like marriage, divorce, having a child, or a change in income can all affect taxes.
Congratulations, You Got Hired At A New Summer Job!
If you took on a new summer job, be sure to fill out a new Form W-4 for each job you start. Even if it’s just for the summer, the money you earn is taxable and must be recorded on your tax return. This form will not only tell your employer how much income tax to withdraw from your paycheck but it will also determine whether you will receive a tax refund, owe taxes, or be tax balanced (not get a refund not owe taxes) when you file your tax return next April.
Be aware that your employer will still withhold Social Security and Medicare taxes, but not income taxes. If you are claimed by someone else as a dependent and you earn a total income of $12,550 or less during 2021, you generally will not owe taxes or be required to file a tax return.
‘Tying The Knot’ This Summer
Getting married has a significant impact on your tax situation. Though taxes may be the last thing on your mind when you’re getting married, being tax-ready might make tax filing your 2022 tax return in 2023 a breeze.
If you get married on or before December 31 of a given tax year, you’re considered married for the full year. You must either file as married filing jointly or separately. Examine both of your incomes closely because your tax brackets may alter if you file jointly with your spouse.
Organize Your Finances
If you’re incredibly organized, you’ve probably already marked and filed every receipt since the month of January and meticulously documented your income and expenses for the year. You might even be aware of your existing tax situation.
Those of us who aren’t as nearly as organized have some catching up to do. But don’t worry, getting started isn’t as difficult as you would imagine. It is easy as sorting through your belongings and tossing out what doesn’t have any value and filing and updating your financial records.
Resolve Your Tax Bills
If you’ve found yourself in a nasty mess with the IRS, take a deep breath. For taxpayers who may have difficulty paying off an excessive amount of tax debt, there’s a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program. Any issues regarding back taxes, unfiled years, or any other tax-related problems may be solved through one program; the IRS Fresh Start Program!
How Simple Is Qualifying?
Considering that the Fresh Start Program is a federal program, you would think meeting the qualifications may be very difficult, but really, it’s a lot simpler and quicker than you think. Take the following steps in order to find out if you are eligible in as little as 3 minutes.
- Fill out some basic information about yourself and your back taxes here.
- Have a representative reach out to you to discuss your eligibility.
- Go through the enrollment process and finally reduce or eliminate your tax liabilities.