Tax season can be a time of great anticipation for millions of Americans with dreams of a nice, big, refund check coming soon. Yet this year, many Americans may find themselves surprised and coming up short on their refunds.

Many taxpayers have been shocked to find that this year, instead of a big tax refund check arriving in the mail, they are being saddled with an unexpected bill from Uncle Sam. The combination of recent tax law changes and updated employer withholding tables has left individuals scrambling to figure out how to pay for their new IRS obligations due at filing time.

If you’re worried about a looming tax bill, never fear: there are measures you can take to ensure that your taxes don’t unexpectedly balloon. From budgeting tips to what do when the worst happens, these strategies will have your wallet breathing easy throughout the year!

The Earlier the Better!

Ignoring an IRS debt could ultimately result in serious consequences. It is in your best interest to be aware of any outstanding amount as soon as possible, providing time for tax planning and sourcing the necessary funds.

Don’t let late payments rack up and cause costly penalties and interest. Be proactive about filing your taxes so you’ll have a good idea of what will be owed, if anything, that is needed to be paid on time.

Pay Attention to Your Paychecks

With the recent changes in tax law, your paychecks may have grown more generous – but don’t get too excited! They could mean less of a refund or an unexpected bill when you file. Make sure to stay informed and plan ahead so unpleasant surprises won’t come back to haunt you this filing season.

To prepare for tax season, it’s important to monitor your paychecks and ensure that the right amount is withheld. If you see a decrease in federal taxes being taken out of each paycheck, adjust this with your employer immediately – even though it may mean taking home less every month. Doing so can help protect you from federal and state tax debts and penalties later!

Run Your Numbers Before

With just your final paycheck from last year and a few additional details, you can gain insight into what kind of tax refund or balance due to expect come filing season. It pays to take the time for preparation now so there are no unpleasant surprises later! However, please note that you should never use your 2022 final paycheck to prepare your return. You’ll need the actual W-2 from your employer in order to file a complete and accurate return.

To be prepared for tax season, compile all necessary records of your income, credits and deductions to estimate what you owe. Leverage the power of a reliable tax preparation software or use an everyday calculator with those numbers in hand to better understand your financial situation.

Know You Have Back Taxes or Will Owe A Lot?

Ignoring a tax bill isn’t an option; the IRS will always come knocking. Settling it quickly can save you from further financial trouble, so don’t delay. Your taxes may burden your wallet now, but they’ll take hefty chunks out of your future if left unresolved!

Dealing with the IRS can be a daunting experience for many taxpayers. Even getting the IRS on the phone these days is nearly impossible. Without proper guidance, and expert help, attempting to negotiate your own tax problem is like going to court without a lawyer – not a wise move!

Struggling with tax burdens from the IRS or State? Our experienced team knows the IRS’s “ins and outs”, knows how to navigate the IRS maze and is here to assist you in finding a resolution that works best for your unique situation. Take advantage of our knowledge and expertise by booking an appointment with us today – take control of your taxes, and your life, before they become unmanageable! https://calendly.com/premierbusinessstrategist/freeconsult

If you hire an employee for your Schedule C business, you can qualify for several valuable tax credits. Each credit is different, and certain limitations apply to all or most employer tax credits. Remember, tax credits are the best. They beat deductions. Note the difference below (using the 32 percent bracket):

A $1,000 deduction for wages reduces your income taxes by $320.
A $1,000 credit reduces your taxes by $680 ($1,000 – $320).

Many tax credits are not available if you hire a person related to you, including children, stepchildren, a spouse, parents, siblings, step-siblings, nephews, nieces, uncles, aunts, cousins, or in-laws.

Eight Valuable Tax Credits for Business Owners

Below are listed the eight non-refundable tax credits that Schedule C business owners can claim when they hire employees.

Work Opportunity Tax Credit (WOTC). The WOTC rewards employers for hiring employees from groups the IRS has identified as having “consistently faced significant barriers to employment.”
Family and Medical Leave Credit. Federal law doesn’t require that you give paid leave to your employees who need to take time off for family reasons (such as the birth of a child) or due to their illness or that of a family member. (A few states require some paid leave that’s funded through payroll deductions). But if you choose to provide such paid leave, the federal tax code may reward you with a family and medical leave tax credit.
Credit for Small Employer Health Insurance Premiums. If you have fewer than 50 full-time-equivalent employees, you are not required to provide your employees with health insurance. But if you elect to do so, you may qualify for the small business health care tax credit. This tax credit is available to eligible employers for two consecutive tax years.
Credit for Small Employer Pension Plan Start-Up Costs. This credit is for the cost of setting up an employee pension plan, including a new 401(k) plan, 403(b) plan, defined benefit plan (a traditional employee pension plan), profit-sharing plan, SIMPLE IRA, or SIMPLE 401(k), or SEP-IRA. The costs covered by the credit include the expenses to establish and administer the plan and to educate employees about retirement planning.
Credit for Employer-Provided Childcare Facilities and Services. This little-used credit is intended to encourage employers to provide childcare to their employees. There are two ways to get the credit:

- Build, acquire, rehabilitate, or expand an on-site childcare facility for your employees’ children, and help pay to operate it.
- Contract with a licensed childcare program, including a home-based provider, to provide childcare for your employees.

The second option is more realistic for smaller businesses. Businesses often partner with childcare companies such as the Learning Care Group, Bright Horizons, and KinderCare to offer this benefit.

Empowerment Zone Employment Credit. Is your business located in one of the designated empowerment zones? These are areas of high poverty and unemployment identified by the U.S. Department of Housing and Urban Development or Secretary of Agriculture. You can find a list and map on the HUD website.

Key point. You might be surprised which places the government designates as having high poverty and unemployment. It’s worth checking out.

You can claim a credit equal to 20 percent of the first $15,000 in wages you pay to full- or part-time employees who both live and work in an empowerment zone.

Thus, the maximum credit is $3,000 per employee (20 percent x $15,000). The employees must work for you for at least 90 days.

Credit for Employer Differential Wage Payments to Military Personnel. This credit is available if you have an employee in the military reserves who are called to active duty for more than 30 days. If you continue to pay the employee all or part of that employee’s wages while he or she is on active duty, you can claim a credit equal to 20 percent of the payments, up to $20,000.
Indian Employment Credit. This credit is available only if you hire an enrolled member of an American Indian tribe who both lives and works on an Indian reservation. If this is the case, you may claim a tax credit equal to 20 percent of the wages and health insurance benefits you provide the employee. The Indian employment credit ends December 31, 2021.

If you would like to discuss how to take advantage of these or other tax credits, please call us at 757-410-8030.

The holidays are here. Not to be a grinch but right around the corner is a less fondly anticipated time of year. Before you know it, you will be taking down the Christmas tree, pulling down the holiday lights, and getting ready for the tax season to come.

Tax season is decidedly less fun than the holiday season, but the two times of the year do have one thing in common. Just like the holidays, tax season requires lots of preparation and planning, and if you want to be ready, you need to start early.

Why are we writing this article? It’s not to spoil your holiday cheer, it’s because we’ve seen what it’s like when you’re not prepared. We help people who fall behind on their taxes and owe the IRS tens of thousands of dollars in back taxes, and it’s often because they simply failed to prepare and they procrastinate on their taxes.

If you do get in trouble with the IRS and they claim you owe $10,000 or more, reach out to our tax resolution firm and we’ll schedule a free, no-obligation confidential consultation to explain your options in full to permanently resolve your tax problem. https://calendly.com/premiersmlbus/consult

So if you don’t want to end up owing the IRS a ton of money, Here are 8 ways to get ready for tax season and reduce your stress level as this annual ritual approaches.

#1 Organize your records.

Now is the time to drag out last year’s tax return, pull out your most recent pay stub, and get organized before the season starts.

#2 Settle any back taxes you might owe.

If you have years of unfiled returns or have a tax issue for anything besides the current year, you should get this handled now, before the upcoming tax season. When April 15th comes around, your tax professional is likely
swamped with returns and they’ll pay less attention to your back tax debt. We recommend reaching out to a specialized tax relief firm like ours that handles complicated tax debt cases all year round.

#3 Defer bonuses and incentive pay.

If you’re going to owe taxes, it might make sense to defer getting paid so you can lower your taxable income. If you can, you might want to defer any bonuses and incentive payments. You can also defer payments from retirement accounts and IRAs to save on current-year taxes.

#4 Look for additional deductions.

Now is the time to make those last-minute donations to charity, so start writing those checks and gathering up those household goods. Be sure to get a receipt and save your canceled checks so you can substantiate your charitable giving if a question should arise later.

#5 Expand your education.

Not only can taking a class to improve your business or career prospects and help you get ahead, but that additional education could also lower your tax bill. You might qualify for a generous tax credit or take a good tax deduction for investing in your future.

#6 Up your retirement savings.

The end of the year is the perfect time to increase your 401(k) contributions and make your annual IRA investment. Maxing out your 401(k) and IRA contributions is one of the best ways to reduce your tax bill while saving for the future.

#7 Sell your losers and let your winners run.

If you have substantial capital gains in your stock portfolio or crypto portfolio, selling your losers could lower your tax bill. You can use those losses to offset your capital gains and save money on your taxes.

#8 Estimate your income for tax planning.

You will not know the exact amount of income you received until all your documents are in, but you can estimate your compensation and start doing some advance tax planning. This can be key in preventing back tax debt
since you won’t be blindsided by a large tax bill come April 15th.

Tax season will be here before you know it, and now is the time to get ready. You do not have to wait until April to start your tax planning, and the sooner you get started, the sooner you can put this unpleasant task behind you.

Need Tax Relief?

If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. https://calendly.com/premiersmlbus/consult