The time to start tax planning is not when tax season starts, Its Now! So how do you start prepping for tax season three months in advance?? Well it is now the fourth quarter. These are the last three months of the year that you have to get tax credits, deductions, and show as much income as you can (for those that need to do that).
One of the simplest ways is to check to see have you paid enough in taxes for this tax year. You won't really know how much you should have paid until you have made all of the money that you are going to earn this year by the last day of the year (or the last pay cycle). But you can get a really good estimate. For 9 out of 10 people, the goal is to not owe taxes. Some people want a refund. Some people just want to break even, and others well, just want someone to tell them how much they owe and pay that.
But for the majority of the people that want to know how much taxes they owe for the year, here's a simple and quick way to check. If your income and circumstances haven't changed too much, make sure you have paid enough in taxes according to your last year tax return. Here's what you will need and how to do it.
First! Get your last year tax return and your most recent check stub.
Next! Look for your total tax on your last year tax return. Write that number down. If you don't see it, it is line 16 on your 1040 tax return.
Then! Look at your federal tax paid for the year on your most recent check stub. Write this number down. If this number is bigger than the total tax number on your tax return you have paid enough taxes for the year. (You can give yourself a pay raise and change your W-4 to tax exempt for the remainder of the year. Woohoo!)
If this number is smaller, subtract the two numbers (calculators are handy here). The difference is the amount of money you still need to pay in taxes. You can try to pay this difference through payroll deductions but if payroll deductions are not enough, you will more than likely have to pay taxes when you file your tax return.
Now if all this math was just too much to handle, WE CAN HELP! Go to our contact page www.dukesats.wixsite.com/dukesaccounting and put 2020Taxes in the subject line and we can figure out how much you still need to pay for you, if any, and suggest how to get it done. Hey! There may even be some credits and deductions that can help with that number. So send us a message or call us at 901-568-9090 so that we can help you today.