Withholding Midyear Checkup

As an employee, if after looking at one of your check stubs, you determine that you probably are not having enough (or too much) withheld from your pay, be sure to fill out a new W4 to correct the problem and turn it in where you work. If your income flucuates dramatically throughout the year, you may want to consider looking at your pay stub again in Nov. You could have a large (or very small) amount taken out in Dec. if necessary.

For a person who is self employed, it is important to make FOUR, EQUAL, TIMELY payments each year, known as quarterly estimates. The next one is due June 15th. If your business has just gotten off the ground in the last three month, run a simple profit/loss statement. Calculate what you have earned so far, then subtract out the known expenses. Whether you will be required to make an estimate quarterly payment will depend on the consequences of what that income will do to your 2013 tax return. Consider putting aside 30% of your earnings if you don’t consult a tax advisor about your situation.

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