Avoid Tax Surprises in 2023: A Guide from NC&F Consulting Agency

Everyone must file taxes; it is important to keep up with the laws and changes that deal with the IRS and incomes in the US

Introduction

As 2023 comes to a close, taxpayers are being urged by the Internal Revenue Service (IRS) to review their tax withholding to prevent unexpected surprises when filing their tax returns next year. At NC&F Consulting Agency, we understand the importance of proper tax planning and want to help you navigate these year-end adjustments. In this blog post, we'll discuss the IRS recommendations and provide guidance on avoiding tax surprises for the 2024 tax season.

Review Your Tax Withholding

The IRS emphasizes the need for taxpayers to review their tax withholding promptly. Even though the year is winding down, making adjustments now can still make a significant difference. This adjustment can prevent outcomes like substantial refunds or unexpected balances due. At NC&F, we recommend that our clients take action and review their withholding without delay.

Utilize the Tax Withholding Estimator

The IRS offers a user-friendly tool, the Tax Withholding Estimator, available in both English and Spanish. This tool assists taxpayers, including workers, retirees, and self-employed individuals, in calculating the correct amount of income tax to be withheld from wages and pension payments. By inputting your specific financial details, you can avoid over-withholding or under-withholding, ensuring your tax situation is accurately reflected.

Consider Making Estimated Tax Payments

For individuals with income not subject to withholding, such as rental properties or gig economy work, it's crucial to consider making quarterly estimated tax payments. By doing so, you can prevent a balance due or penalties when filing your 2023 tax return. The IRS allows taxpayers to make estimated tax payments through various methods, including online payments and the IRS2Go app, ensuring convenient and timely payments.

Be Aware of Life Events and Other Factors

Certain life events, like marriage, childbirth, or job loss, can significantly impact your tax situation. NC&F Consulting Agency advises clients to promptly update their withholding after such events to align with their current financial circumstances. Additionally, individuals affected by disasters, such as wildfires or hurricanes, may qualify for special tax provisions to aid their recovery.

Remember: A Refund is Not Guaranteed

It's essential to recognize that a tax refund is not guaranteed. Proper withholding adjustments are key to maximizing your take-home pay rather than relying on over-withholding and receiving a refund later. By filing electronically and opting for Direct Deposit, eligible taxpayers can expedite the refund process, with most refunds issued within 21 days.

Conclusion

At NC&F Agency, we encourage all taxpayers to take proactive steps in reviewing their tax withholding and making necessary adjustments before the year ends. By utilizing the resources provided by the IRS and staying informed about life events that could impact your tax situation, you can avoid unexpected surprises and navigate the tax season with confidence.

For personalized assistance with tax preparation and planning, contact NC&F Consulting Agency today. Let us help you make informed decisions and achieve financial peace of mind.