What can I do throughout the year to avoid paying more at income tax time?
I am divorced and have 1 child. I make too much for earned income credit and have to pay in for income tax. How should I file in the year to avoid having to pay more at income tax time
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Answers
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Hello,
Generally, there a few things you could do.
- I'd recommend revising your W-4. If you find that the amount of taxes withheld from your paychecks is not enough to prevent you from owing, you can increase the amount of taxes withheld. Generally, if you go through a life event (like marriage, divorce, birth of child, etc), I'd recommend updating your W-4.
- If you don't want to bother with that, you can make estimated tax payments. You are not required to fill out a 1040-ES. You can just make an estimated payment online direct to the IRS. These are divided out quarterly, although you are allowed to make payments more frequently than that.
- You can review what credits and deductions you may qualify for. For example, if you need a new car, you can look into getting one that qualifies you for the Clean Vehicle Credit (new and used cars can qualify). If you otherwise qualify, that could get you a few thousand dollars in tax credits.
