Well, within the next week or so, employers are (or should be) sending out W2s and thus begins the real work for me and the team.
One of the least common things for many people who get a regular paycheck is a tax bill, but in the last few years, with Covid, many people changing jobs, and even more getting some aid from the government, there have been a few surprises. Frankly, it all began before covid, with the new tax bill signed in 2017.
You probably remember – it wasn’t fun for a lot of people, but, to the credit of the government, they did tell us exactly what was happening.
Statistically, most people did pay less in taxes over the year, but the withholding standards had changed, so at the end of the year, people who had never had to pay the IRS suddenly did.
Unfortunately, all the upheaval since then has made “tax season” far more stressful for W2 earners even though the tax codes hasn’t been altered. How people earned money has changed, with more and more people involved in the so-called “gig” economy, delivering groceries, driving for Uber, and so on, and those former “employees” suddenly became “contractors.”
… And they might owe the government a lot of money very soon on income that was never taxed.
Sound familiar? All over the country, people are going to have this struggle, and the worst part is most can avoid it if they take action now. Even if they have to pay, those payments can be set up now – not in April – and begin to lower balances and keep them out of financial dire straits.
Can I diagnose your troubles – if you even have them – in an email? Of course not. What I can say is this: if you changed jobs, lost your job, or got laid off last year and began working as a contractor to make ends meet, you’re still responsible for the money you made.
If you didn’t pay taxes on it, you will still have to, so it might be a great idea to begin to get a handle on this a little early.
Give us a call to go over the scenario you found yourself in – it’s not going to hurt, but it can absolutely help to get you sorted out and ready for tax season.
At the same time, it’s also important to recognize that when tax season really gets rolling a lot of preparers and accountants are going to be slammed with business. The companies we help and represent have even more questions, and the number of honest and experienced tax professionals has never been large.
In fact, my biggest fear is the many “fly-by-night” companies that take advantage of people is going to be a huge problem this spring.
I want to make sure you aren’t paying too much in taxes, but I also want to make sure you don’t get take advantage of.
Give us a call and let’s get things figured out.
All the best-