Tired of Owing Too Much to the IRS?

There is nothing worse than finding that, come tax time, you owe a big debt to the IRS. But, sadly, many people find themselves in this situation each tax year. If it’s happened to you or if you’re just scared that it might, know that there are things you can do to reduce your tax liability and to feel less stressed at tax time.  

Ask to Have More Withheld  

Sometimes, people owe too much in taxes just because they’re not having enough taxes withheld by their employers, which can happen for a number of reasons, such as choosing the wrong filing status or not compensating for earnings from other sources of income.  

Thankfully, adjusting your withholdings is as simple as adjusting your W-4, which you can typically do by working with your employers’ human resources department. If you’re not sure how best to adjust your withholdings, work on this form with the help of a tax professional.  

Save for Retirement 

If increasing your withholdings is not an option or if it’s not getting you the results you desire, consider contributing (or contributing more) to a retirement account. This smart step could help you plan for the future while reducing your present tax liability at the same time. For example, if you open up and contribute to a standard 401(k) or an IRA account, you can deduct your contributions from your taxable income, which will, in turn, reduce your taxes owed.  

Deduct Any and Every Business Expense

Sometimes, excess taxation happens simply because a person isn’t deducting when and where they can. Did you know that many of your business expenses, especially if you’re self-employed, can be deducted? The money you spend on business travel and lodging or on certain business supplies, for example, could qualify for a deduction, and when you add up all your deductions, it could just make a huge difference in how much you owe.

Ultimately, if you find yourself regularly owing too much to the IRS, you need to make some changes. And, while these changes could be a good place to start, understand that professional tax help is likely going to be your best for saving money long-term and in smart and legal ways that set you up for continued success.