Tax filing season is here again, and millions of hardworking Americans are already dreaming of those fat refund checks. Unfortunately, many of them are being let down this year.

The combination of recent changes to the tax law and updates to employer withholding tables have shrunk the size of tax refunds – and left some unlucky taxpayers with a bill instead of a check. After hours of online shopping and planning ways to spend their large tax refund, these taxpayers are struggling to pay the unexpected tax bill.

So, what can you do if you find yourself in this uncomfortable situation? How can you avoid ending up with a big tax bill this year? Here are some tips to help you avoid a tax bill and some advice on what to do if you get one.

Pay Attention to Your Paychecks 

Thanks to recent changes in the tax law, your paychecks might have been larger than ever before. And while that is ultimately a good thing, the reduced withholding could mean a smaller refund, or even a tax bill, when you file.

If you want to avoid a tax day surprise, pay close attention to your paychecks, especially the amount withheld for federal taxes. If you see the withholding has gone down, you can ask your employer to adjust it to make sure you’re withholding the right amount. That will shrink your paycheck back down, but it could save you future tax debt and penalties.

You will need as much information as you can get on your income and deductions. Make sure to gather as much documentation as you can. Then, take a trip to see your Enrolled Agent, and he can give you an idea on your numbers.

File as Early as You Can

If you do owe money to the IRS, it pays to know about it as soon as possible. Filing as soon as you can means you will have more time to make a plan. This will help you find the money to pay the taxes due.

Keep in mind that paying late could mean additional penalties and interest, so it makes sense to settle up as quickly as you can. By filing early, or at least running the numbers, you will know where you stand.

If you do get hit with a surprise tax bill and lack the money to pay it, you need to settle your tax problem as soon as possible. The IRS wants their money, and they have unbridled authority to get it. Simply avoiding the tax bill will not make it go away. It will make it worse.  A lot worse.

However, dealing with the IRS is often intimidating for most taxpayers. Talking to the IRS and trying to resolve your own tax problem is like going to court without a lawyer. You’ll most likely get crushed.

A tax resolution firm like ours has years of experience helping taxpayers just like you resolve IRS and State tax problems and negotiating the best deal on your behalf. If you owe the IRS money, contact us now for an appointment to learn about your options.

Don’t talk to the IRS, talk to us first.

The good news is the IRS has several debt settlement options. This includes their Fresh Start Initiative. They are generally willing to settle with taxpayers who have been blindsided by a surprise tax bill and get pay it off in full.

Hopefully, tax filing season will bring the big fat refund you are expecting, but it is important to be prepared for the unexpected. The new tax bill has unleashed a host of unintended consequences, including smaller refunds and surprise tax bills. By being prepared, you can reduce the pain of a surprise tax bill.

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Jeffrey Schneider, EA, CTRS, NTPI Fellow has the knowledge and expertise to help you reach a favorable outcome with the IRS. He is the head honcho at SFS Tax Problem Solutions as well as an Enrolled Agent, a Certified Tax Resolution Specialist and Advanced Crypto Tax Expert.
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Author of the series Now What? Help! Jeff defines and deconstructs IRS notices and clarifies letters and actions the IRS will take to get what they want. He interprets the world of the IRS in a fashion that mixes attention to detail with humor to help you better understand and resolve your tax problems.

The books are available in paperback and eBook on Amazon.
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For more on SFS Tax Problem Solutions, visit http://sfstaxproblemsolutions.com/
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