Insufficient Withholding: A Key Factor in Tax Debt
Self-Employment and Life Changes Impacting Tax Liability
According to AOL, as the 2024 tax season is coming Americans get ready to file their taxes some might end up owing money for a few reasons. One main reason is not having enough taxes taken out of their salaries during the year. If they didn’t claim enough allowances on their W-4 forms they might owe more when it’s time to file. People doing self-employed work, side jobs, or making money passively might owe taxes in one big payment if they didn’t make smaller payments throughout the 2024 tax season. Big life changes like getting married, buying a home, or changing jobs can also affect how much tax someone owes.
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Reduced Deductions Leading to Tax Obligations
Another reason for owing taxes is having fewer things to deduct. If changes in their situation mean they can’t deduct as much for things like medical expenses, student loans, or mortgage payments, they might get a smaller refund or owe money. Americans who made money from new investments like cryptocurrencies or real estate might have to pay taxes before the 2024 tax season ends on the profit they made. To avoid owing taxes it’s a good idea for people to check and adjust how much gets taken out of their paychecks or make sure to pay enough in estimated taxes, especially after big life changes.