What is the best way to avoid owing the IRS money?

 Posted on January 29, 2020 in Tax Debt

No matter the time of year, it is always best to think about the upcoming tax season. Being caught unawares could result in you owing the IRS money rather than receiving a refund check.

To help, the Nest provides several ways to keep your tax bill as low as possible. Be sure to keep the following in mind, no matter the time of year.

Take advantage of all your deductions and credits

Sit down with your accountant to discuss all credits and deductions for which you qualify. This is an especially good idea if you leased a car for work, recently made upgrades to your home designed to save energy or enrolled in school.

Make changes to your W-4 form with your employer

Have you married or divorced since the last time you filed your taxes? Maybe you welcomed a new baby or simply got a promotion at work. Any major changes to your life (or your tax bracket) may require a change to your W-4 form with your employer so that you do not incur an unnecessarily high tax bill.

Support your deductions and claims

If you are self-employed or have a side gig, you may make deductions that other taxpayers do not. If so, you should go to great lengths to be sure that you have proof of all claims and deductions. Should you ever find yourself audited, keeping accurate records and proper evidence could keep you out to hot water with the IRS.

File before the deadline

When you file late, you incur late fees and penalties. That is why you should set a reminder to file well ahead of Tax Day.

You work hard for your money, and you deserve to keep as much of it as possible. Use these tips to keep the IRS's hands out of your pockets.