End Of Year Withholding Review
We are coming to the end of another year and it’s time to do a little bit of tax housekeeping. Nothing big, just a small detail that can make a big difference when you get to your taxes early next year. If you are employed, it’s a good idea to review and make sure your withholding amounts are correct.
It’s critically important if you’ve had a big change in your life. For instance, you got married, had a child, divorced, or had a death in the family. Also, if you bought a new home this year, that could affect your year-end taxes. Another item to be aware of is any changes in tax laws could be a reason to check and adjust your withholding.
While the IRS did change the income thresholds for all tax brackets in 2022 to reflect the rise in inflation, they did not change the tax brackets from what they were in 2021. There are still seven:
10%, 12%, 22%, 24%, 32%, 35%, and a top bracket of 37%. If you got a raise, that could put you into another, higher tax bracket which would mean more taxes coming out of your paycheck.
A little bit of housekeeping at the end of the year can prevent surprises at tax time. If you have not paid your taxes in a few years and would like to get on the right side of the IRS, give us a call. It’s one of those loose ends that you’ve been meaning to tie up, and now is a good time to take care of this unfinished business before you get into deeper trouble with the IRS.