As we are wrapping up the 2021 tax season, this is the phase of tax season that we (tax preparers) see clients that owe money to the IRS. There are many different reasons why you the taxpayer owes money to the IRS: either not having enough withheld out of your check, you started a business and made a lot more money than you thought you would and now have a huge self-employment tax, or you took money out of a retirement account, or one of the many countless other ways that you would owe the IRS money.
You don’t have to wait till the last minute to find out that you owe. If you plan throughout the year, you can be prepared so you don’t owe!
If you only have a W2 job, you got married, or took money out of a retirement account and want to make sure you had enough withheld, go see your tax preparer in Sept/Oct so they can check and make sure you are having enough withheld.
If you started a business and are not sure if you made a profit or going to owe, quarterly check-ins with your tax preparer would be best for you. Bring them your Profit and Loss Statement (https://pinabiz.com/what-are-financial-statements) so they can give you some tax planning advice throughout the year, instead of finding out you owe $18,000. Doing this quarterly will ensure that you are taking all your expenses and not leaving any on the table because it was so long ago you forgot all about them. Next week we will talk more about setting up the right type of tax entity for you.
Either way, quarterly or at the last quarter of the year, be in communication with your tax preparer so they can help you not owe so much and figure out want other credits and deductions are out there for you to take advantage of. As long as they are taking those continuing education hours every year, they should be able to help you out.
Remember there are no extensions to pay your tax, it is due on Tax Day, April 15, 2022. If you don’t pay the full amount penalties and interest will be added to your tax bill, until it is paid off.
As always, we are here for you, feel free to schedule a consultation at www.pinabiz.com and we would be happy to answer any questions or do a tax analysis for you.
*PS: It is Restaurant Week in Cheyenne; will you be participating in it? Have you downloaded the app? Tag me in your post with the hashtag #GabeLoveTaxes and I will enter you in a drawing for a dinner for 2 at one of the Restaurant week locations. *