Have You Done a Tax Checkup Lately? Here’s Why You Should.
As 2019 slowly but surely winds down, you may be too preoccupied with holiday shopping and last-minute travel plans to focus on your taxes. But actually, now's the perfect time to give yourself a tax checkup and see if any adjustments on your part need to be made before the end of the year. Here are a few key items to focus on.
Having the right amount of tax withheld from your paychecks will help ensure that you don't run into trouble during next year's tax season. And by "trouble," we're talking about owing the IRS a whopping sum you can't pay, and being penalized financially for underpaying your taxes.
The reason it's so important to check your withholding is that ever since the 2018 tax overhaul went into effect, new IRS withholding tables were issued that, in many cases, put more money into workers' pockets up front. The problem, however, is that some people have been getting a little too much money up front, and if you're one of them, it could spell trouble next April. Therefore, use the IRS's Withholding Estimator to see whether it pays to quickly submit a new W-4 to your employer. If it turns out you've been underpaying your taxes, withholding enough in December could help correct that mistake (though you'll reduce your paycheck in the process, so keep that in mind, too, especially as we go into the holiday season).
Source Fool.com