Many Pennsylvania residents were shocked this spring when they completed their tax returns and discovered they owed money to the IRS. Others may have filled out their forms fully aware that they would be paying taxes since they owe money every year. Some may have tax debt on which they are paying installments with no end in sight. However, the Government Accountability Office recently released a report that includes advice for those with these tax issues.
The GAO report shows that two out of every 10 taxpayers have too little deducted from their paychecks to cover their taxes. This means they end up owing money to the IRS each year instead of breaking even or receiving a refund. New tax laws include drastic changes in deductions and exemptions for many people, so the GAO recommends that workers take the time to review their withholdings with their employers.
By using the new version of the IRS withholding calculator, taxpayers can calculate the most appropriate amount to have withheld by their employers for tax purposes. This may prevent workers from owing money or at least reduce the amount owed. Additionally, it is always a good idea to review one’s withholdings from time to time, especially if life circumstances are different from when they were first hired.
The new federal tax laws could bring some unpleasant surprises to those who do not take the time to review and perhaps alter their allowances. Pennsylvania residents can find assistance with an attorney who can explain how the new laws affect their tax implications. Whether one is confused about tax preparation or is dealing with more serious tax issues, an attorney can provide skillful advice and guidance.