![]() ![]() Getting divorced will have tax implications beyond simply adjusting your W-4. ![]() “These have tax implications and changing your W-4 alone is probably not the best indicator.” “Changes to income, investments, pay raise, job change, part-time work, college graduation, death, marriage, birth, home purchase or selling, rental property are all reasons to reach out to a tax professional,” Larry Gray, CPA at AGCCPA and government relations liaison for the National Association of Tax Professionals ( NATP), told Yahoo Money. Other income info (side jobs, self-employment, investments)Īdjusting your payroll deductions can help increase or decrease your refund during tax season, but it's not a perfect tool. Paystubs for all jobs (including your spouse's) The process is involved and requires you have the following documentation to complete: ![]() The tool takes into account your expected W-4 income (including expected bonuses), income from other sources, and credits and deductions you take. If you like the anticipation of a bigger refund, the IRS has a calculator that helps you estimate the amount of money you need to have withheld from your paycheck to get a refund size of your choice next tax season. Adjusting your W-4 withholdings is only part of the equation Some taxpayers may have seen larger refunds this year after key changes from pandemic-era tax legislation qualified them for credits they previously weren't eligible for in previous years, such as the Child and Dependent Care Credit and the Earned Income Tax Credit. That didn’t happen this tax season so people may have had smaller refunds or owed Uncle Sam, thinking the same provision would be in place.Īdditionally, in 2021 “taxpayers who didn’t opt out, received advanced monthly CTC payments throughout the year instead of the end of year, making refunds smaller,” Joanna Ain, associate policy director at Prosperity Now, told Yahoo Money. Unlike previous tax seasons, pandemic tax relief efforts affected the size of some tax refunds.ĭue to the pandemic, the first $10,200 in unemployment benefits collected in the tax year 2020 were not subject to federal tax. (Photo: Getty Creative) Pandemic relief affected this year's refunds ![]()
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