Why Do You Owe the IRS So Much Money This Year? A Guide to Understanding the Real Reasons and Planning for the Future

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Your tax return is complete and, to your surprise, you’re facing a huge bill. This may feel like a shock right now, but as you begin to delve into your tax situation, you might realize that signs of trouble were there all along.

Now, it’s time to look at the issues underscoring your IRS drama and learn which changes will make future tax seasons easier to handle.

You Neglected to Pay Quarterly Taxes

Often, large tax burdens are most surprising to those who have recently made the jump from W-2 to 1099. Even if the actual amount dedicated to taxes hardly changes, it can seem like a lot when your tax obligations were previously withheld by an employer throughout the year.

Quarterly payments help you handle your taxes over time. Neglect them, you’ll face not only a huge bill, but also, the potential for extra penalties.

You Haven’t Changed Your Withholdings

Did you know that the protocol for withholdings changed in 2019? If you’re like many taxpayers, you have yet to adjust your W-4 accordingly. This may impact how much you owe.

While W-4 changes such as the elimination of allowances may seem problematic at first, the new form may actually save you money in the long-run — and if you have both a regular job and self-employment income, you can handle both to help you stay on top of your tax obligation.

At Highland Tax Group, you’ll find assistance not only with immediate tax concerns, but also, guidance for long-term implications. Contact us to learn not only how you can deal with your current IRS issues and also start planning for a more secure future.