As millions of Americans file their tax returns, many are in for an unwelcome surprise this year – a smaller-than-expected refund or even owing taxes. What happened? Chances are employers adjusted tax withholdings according to the new IRS guidance.
These adjustments led to smaller amounts being deducted from paychecks throughout the year, culminating in an unexpected shortfall for some taxpayers during the filing season.
This unexpected tax bill is particularly shocking for those who did not recalibrate their W-4 withholdings to counterbalance these changes. Consequently, many taxpayers discovered they received thousands of dollars less than they typically anticipated in refunds.
Tax experts continually caution that such discrepancies are common when there are modifications to withholding regulations. However, it’s not too late for taxpayers to rectify this situation to ensure a more favorable outcome in future tax seasons.
Expert tax preparers at ATC Income Tax in Atlanta advise a prudent strategy to manage a lower-than-expected refund or a balance, obtaining a tax refund advance loan. This can immediately relieve any outstanding taxes or expenses until the refund is processed. Additionally, it’s critical to update your W-4 form to ensure that future withholdings accurately reflect your eligible deductions and tax credits.
To prevent the shock of owing taxes or receiving a smaller refund at the 2023 filing time, we recommend the following actions:
- Review your current W-4 form to ensure that withholdings align with your tax situation.
- Utilize the IRS Tax Withholding Estimator tool to determine your job withholdings’ accuracy precisely.
- Consider opting for additional withholding from your remaining paychecks this year to cover any potential shortfall.
- Engage a professional tax preparer for a comprehensive review of your tax strategy.
It’s important to remember that while over-withholding can lead to a refund, under-withholding may result in penalties if taxes are not paid promptly. Taking proactive measures now, such as adjusting future withholdings or securing a tax refund advance loan, can help stabilize your financial situation and guarantee the maximum refund possible.
Moreover, staying informed about any new IRS withholding guidelines is crucial for optimal tax planning and ensuring that you’re not inadvertently leaving money on the table come tax season. The team of tax professionals at ATC Income Tax is ready to assess your situation and assist in maximizing your refund potential for this season and the next.
ATC Income Tax, located in Decatur, Atlanta, and Milwaukee, offers expert tax preparation services to ensure accurate return filings and maximize tax refunds. For more information on how to apply online for a “tax refund advance loan,” please contact us.
Disclaimer: This material is not intended for financial advice but primarily for general informational reasons. Terms and conditions, such as qualifying requirements and loan periods, may be applicable.
Note: April 15th, 2024 (April 17th for residents of Maine and Massachusetts) is the deadline for filing tax returns for the year 2023.
