The new tax laws passed last year meant more money in most people’s paychecks, but for millions who saw a bump in their take-home pay, some are now receiving a smaller tax refund.
H&R Block tax specialist Linda Mather said tax preparers are busy counseling clients on how to make sure they don’t owe money next year.
“The tax tables are set up to take out less taxes,” said Mather. “Some people are surprised.”
It may be too late this year, but to avoid problems next year, Mather recommends decreasing the number of dependents on your W-4 tax forms.
She cautions that the more dependents you claim, the smaller the amount taken out of your check and you could end up owing the government at tax time.
The U.S. government estimates 4 million people will wind up owing this year because some deductions for the self-employed have been phased out.
Experts say if you do end up owing the IRS you have three options:
- You can set up a payment plan with the IRS but interest rates will apply
- You can ask the IRS to place a hold on the amount you owe – but again, you’ll have to pay interest and late fees.
- If you can prove you can’t pay the entire amount, you may be able to negotiate a settlement with the IRS.
For more information, go www.irs.gov