Tax season is a hectic time of year, and while it’s nice to receive a refund, that’s not the reality for everyone. Are you someone who usually has to pay the Internal Revenue Service? If you are, then it’s in your best interest to verify that you’re not overpaying taxes.
If you’re wondering if you’re dishing out additional cash to the IRS, check out these clues that’ll let you know if you’re overpaying.
Having a Child
One of the major life changes that can drastically affect your taxes is having a child. Whether you birth or adopt a child, you must remember to adjust your tax withholding.
Becoming a new parent makes life busy, so you might forget and file your taxes the way you’d always done so. But of course, you’ll overpay if you don’t add your new addition.
When you have a child, they become a dependent. You can typically get more money back with an extra dependence on your taxes.
If your spouse earns an income, it can definitely affect your household’s tax bill. Also, if your spouse is dependent, then it’s important to remember that your withholding amount should be reduced.
Not to mention, if you get a divorce, you should add the proper amount of dependent children on your taxes, along with your updated marital status.
When you fill out your taxes, you must account for any second income earnings that you receive. If not, you’ll sometimes have to pay more to the IRS. If you adjusted your withholding to reflect a larger income, but you didn’t work that job throughout the year, you must adjust it again.
Let’s say you altered your withholdings to reflect your second income, but your side job fell flat. You have to correct that on your tax form, otherwise, you’ll overpay.
What Happens If You Overpay Taxes?
Americans overpaying on their taxes is something that the IRS is equipped to handle. If you overpay your taxes, the IRS will send you a refund for the extra amount.
It usually takes about 3 weeks for them to process and issue the money. However, if you prefer not to get a refund, you also have the option to put that extra amount towards the taxes for the following year.
If you notice later that you’ve overpaid and you want your money back, file an amended return. Just remember to do so within the allotted time frames.
To learn more about filing taxes, check out WealthAbility.
Avoid Overpaying Taxes
Listen, you’d probably avoid paying your taxes if you could. But the truth is, you can’t really get away from it. Although your taxes must be paid, that doesn’t mean that you have to give away more money than needed.
Hopefully, the information above helps you to avoid overpaying taxes in the future.
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