Tax Underpayment

November 10, 2016

One of the things that people hate most about taxes is getting a huge bill in April.  This year you should check how much money in withholding and/or estimated taxes you paid and how much money you owe at the end of the year.

If you owed a lot of taxes last year, you might want to file a new W-2 with your employer to increase the amount of money that is withheld from each paycheck for the rest of this year, which will make it much less painful paying that big bill in April.

Keep in mind that there are other kinds of taxes too.  If you employ household workers, are you sure your calculations include the payroll taxes you’ll owe for them?  If you have investment income, remember the 3.8% tax on net investment income when you make your plan!