Are You Prepared for Your Tax Bill?

by Miranda Marquit · 0 comments

Now that it’s a new year, it’s time to think about your tax bill, and whether or not you are ready to pay it. You might be surprised at how many people are unprepared to pay their taxes when their bills come due. As you get ready for this year, it’s time to prepare for your tax bill.

How Much Do You Owe?

One of the best things you can do is figure out your taxes as early as possible. Many of us, especially if we know that we will owe, prefer to wait for as long as possible before figuring taxes. It feels like it’s too painful. However, if you don’t pay quarterly taxes, and if you don’t know where you stand, it makes sense to take the time to figure your taxes as early as possible.

You can do this by working out, roughly, what you owe with the information you have. You don’t need to file your tax return if you aren’t ready to, but you can still get a good idea of where you stand. Make it a point to estimate what you owe so that you are prepared. I like to bring my documents in to my accountant as early as possible so that I know what I face. Usually, even though I pay quarterly taxes, I still owe more — especially when it comes to state taxes. I want to know if there are steps I need to take to prepare ahead of time.

Start Preparing to Pay Your Taxes

Now is the time to start preparing to pay your taxes, if you owe. If you know that you will money on your taxes, it makes sense to consider your options so that you are prepared. If you owe a relatively small amount, you can prepare by setting aside a little bit of money each week so that when April 15 comes around, you will be prepared to pay what you owe.

Another strategy is to consider your payment plan options. The federal government offers a payment plan to taxpayers who can’t make their payments on time. Additionally, most states also offer payment plans. So, if you don’t think that you will be able to pay the entire amount, you can see if you are eligible for a payment plan. Be aware, though, that these are considered loans. You will be charged a fee, so you need to be ready for that. Additionally, in some cases you are considered in default if you miss a payment. Find out if there is an automatic withdrawal so that you don’t have to worry about missing a payment with your loan.

Then, for next year, set aside an amount of money each month to pay taxes. You can pay quarterly, as well as set aside money for your state tax bill so that when the time comes, you aren’t scrambling to get the money together for your tax payment. It’s never fun to owe money to the IRS, but it can be a little less stressful if you plan ahead, rather than be caught at the last minute.

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