Are you one of the people who look forward to tax season because you get a HUGE refund back? I’m talking thousands of dollars back in your pocket…probably more money than you normally save in a year. You love it so much because now you can pay off a credit card, buy a new 65″ TV, go shopping, book that trip you’ve been trying to save for….
You love your refund.
If you are receiving a large refund each year when you file your taxes, it means that you are overpaying. Basically, you are loaning your own money to the IRS throughout the year and they are giving it back to you when you file your taxes.
There’s a chance they are only giving a portion of your taxes back. Since 95% of tax returns are filed with missed deductions and other tax-saving opportunities, it’s very likely they aren’t giving you all your taxes back.
Doesn’t make the refund seem so great now….
The ultimate goal when you file is to have both parties owe $0 to one another meaning you paid exactly what you were liable for, nothing more and nothing less. Realistic? No..it’s impossible to estimate the exact tax you will owe, however, you can have your tax liability estimated through what I call a “Tax Projection.”
Going through this process, I work with you to estimate about how much your income, deductions, etc. will be for the year, and that allows me to calculate what your tax liability will be given these assumptions and estimates.
Overall, it will help you keep more money in your pocket, and if it’s determined you will owe much more than you are paying in, help you by giving you enough time to pay in and also avoid underpayment and late payment penalties.
This should be something to consider, because who wants to pay the IRS more money than they need to? Not me.