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STRATEGIC TAX LAWYERS:  TAX BLOG

Strategic Tax Lawyers’ Summer Tax Recommendations

Friday, August 7, 2015
Now is the time to start thinking about next year’s tax season. The tax attorneys at the Strategic Tax Lawyer suggest that when preparing to file next year’s federal tax return, summertime is the time to start thinking about it.  For example, the tax attorneys recommend changing the amount of taxes that are withheld from your wages.  They also suggest that taxpayers paying the IRS the amount of taxes you realistically owe by changing the amount of estimated taxes you pay to the IRS.  Many of the following strategies done now before the tax season starts can help you avoid getting too much or too little taxes withheld in advance.

For example, if you are a new hire, you should complete a new W-4 Form and go to the IRS website to use the online calculator to figure out the amount of federal income tax that makes sense for your finances that you want withheld from your paycheck.  Tax professionals suggest trying various calculations to estimate if it is better to have more money withheld from your pay or less, depending on your financial situation. Also, if you are planning to get married, have a child or buy a house, then you can change the amount of taxes you owe by submitting a new W-4 form to your employer.  

If you are a taxpayer that is self-employed or if you collect rent, interest and/or dividends, then you may need to pay an estimated tax, especially if you owe over a thousand dollars.  Use the 1040-ES form located on the IRS website to help you figure out when and how much you will need to pay. This may need to be paid up to four times per year.  

Also, if you have a teenager living with you who has a summer job, they will need to fill out a W-4 Form. Parents can show their children how to withhold taxes from their pay, similar to the steps above. They can also use the IRS withholding calculator tool on the IRS website.  Even if your teen is working for others babysitting or mowing lawns, they are considered self-employed.  The money that they earn is taxable. The Strategic Tax Lawyers suggest teaching your teens to keep good records of all income earned, expenses related to work since deductions will cut the taxes owed, and all bank statements showing any income earned.  If your teen is earning tip, then tip income is taxable. It is important for them to keep a daily log to report their tip income.  If they earn more than $20 in any month, then it needs to be reported. It is expected that yearly tips be reported on tax returns.

If you need to hire a reliable team of Tax Attorneys in Los Angeles, contact the Strategic Tax Lawyers Firm.  We are tax attorneys who have years of success in the tax code and with the IRS.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related matters.