IRS Reminds Taxpayers to Check Withholdings Ahead of Friday’s Filing Deadline
The IRS is reminding taxpayers this week to check if they are eligible for withholding before the Oct. 15 deadline.
Withholding allowances include life-changing events like marriage, divorce, the birth of a new child or home purchase. These are all valid reasons to adjust withholdings.
For employees, withholding means the amount of federal income tax withheld from your paycheck.
You can determine how much you can have withheld from your taxes using the Tax Withholding Estimator found here.
This tool, also available in Spanish, helps taxpayers determine if they have too much withheld and how to make an adjustment that can put more cash in their pockets come tax time. It can also help taxpayers see if they should withhold more or if they may owe taxes, which can avoid a tax bill come tax time next year.
This year, you can utilize certain coronavirus tax relief options as eligible tax withholdings. This includes tax help for taxpayers, businesses, tax-exempt organizations and others, including health plans, that were affected by the coronavirus pandemic. A job loss can also create a change in tax withholdings as well as switching the type of employment you have.
The IRS advises that people earning income in the gig economy consider estimated tax payments to the IRS in order to avoid tax balances or penalties when they file.
Getting married, having a child or an additional child can also affect the size of your tax refund.
The IRS also reminds taxpayers that taxes are generally paid throughout the year whether they come from salary withholding, quarterly estimated tax payments or a combination of both. About 70% of taxpayers add, over-withhold their taxes every year, which typically results in a refund to the taxpayer. In 2021, the average tax refund was more than $2,700.
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The final tax deadline is Fri., Oct. 15. This applies to those who filed a request for an extension, not the general public whose deadline was back in April. If you have not yet filed for an extension and have not yet filed taxes, you may still file but will likely be hit with a tax penalty or fees.
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