Our friends at Breedlove & Associates shared a great article with us last about tax refunds and tax payments. Since we are less then a month away from the April 15, 2013 deadline to file taxes, I thought it might be a good reminder to check withholdings for the 2013 tax year etc.
For those who end up owing a lot of money to the government, some get frustrated with their employer – assuming they didn’t withhold taxes correctly.
Although that happens sometimes, the more common explanation is simply that the tax withholding process is very imprecise. Form W-4 is the IRS worksheet used to roughly estimate tax liability through an employee selection of “marital status” and “allowances.” The selections determine the amount of taxes your employer withholds from your paycheck each payperiod. But it is a very rough estimate. And if your tax withholdings are a little too high or a little too low each week, it can add up – over the course of an entire year – to a larger-than-expected payment or refund.
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