As PCDC prepares for our free VITA tax filing service, we want to share with you a lesson learned from our clients last April.
Please make sure that you are withholding the appropriate amount of taxes from your paycheck each week. If you owe more than $1,000 in income tax at the time of your income tax filing on April 15th, you may have to pay the IRS a penalty for underpaying your estimated taxes to the IRS. According to the IRS, it has seen an increasing number of taxpayers subject to penalties, because they underpaid their estimated taxes during the year. In 2010 7.2 million people paid a penalty. In 2015 10 million people paid the penalty.
If you work for a company, the company can help you increase or decrease your withholding tax for the IRS by adjusting your pay check.
If you own a business, your accountant can help you make extra quarterly estimate tax payments to the IRS.