Making More Money

Tax time is exciting for some. You get a large sum of money back from the IRS that you can use to spend on a vacation, new furniture, or some type of home upgrade. If you get this large sum of money back, good for you, but if you have your taxes prepared and it says you owe money, what do you do? Read on for helpful information to guide you if you owe money on your taxes.

Take A Deep Breath

First and foremost, don't panic. You are among many other people that owe money on their taxes, so don't panic. People in dark suits aren't going to show up at your door demanding money, so take a deep breath, and don't panic. If you didn't see this coming, it may seem like a bit of a shock, so ask your tax preparer to explain to you why you owe money on your taxes, and go over your taxes with your tax professional.

Make Changes

If you owe on your taxes, you need to make a few changes. Once you have figured out why you owe your taxes, make any changes you can so you don't owe again the following year. This means if you claim 2 on your W-4, change it to claim 0, instead, so more taxes are being withheld from your paycheck. You may notice a difference with less money on your paycheck, but the change will help prevent you from owing a large sum at the end of the tax year.

If you have taken money out of your retirement fund, you may have owed due to this. Try your best not to take from this before you are of retirement age to prevent owing on your taxes. 

If you owe due to being self-employed, then be sure you are putting money aside from your income to help pay your tax bill. Also paying quarterly will help prevent owing a large sum, as well as owing penalties and interest.

Set Up A Payment Plan

If you aren't able to pay your tax bill in full, you'll need to contact the IRS to schedule a payment plan with them. You're better off paying it off in full to prevent having to pay interest and penalties on top of your tax bill, but if this is simply isn't possible, a payment plan is what you need to do. You will need to stick to the payment plan, and pay your payments on time to prevent any further penalties. Failing to pay or setting up a payment plan could result in legal issues for you. The IRS isn't going to forget that you owe them money.

If you owe money on your taxes, figure out why, make necessary changes, and pay what you owe or schedule a payment plan.

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