While it can be a pleasant surprise to receive a sizable tax refund, it could mean that you withheld too much from your paycheck throughout the year. An income tax checkup before the end of the calendar year can currently put more money in your bank account or save you from a hefty tax bill next April. Here's why we offer a year end tax check up for our clients to whom we provide income tax preparation.

Benefits of an Income Tax Checkup

1. Review Your Paycheck Withholding

A check up helps you determine whether your withholding too much or too little on your salary. If you're withholding too much, you'll receive a large refund.  If you withhold too little, you will potentially have a big bill, penalties, and interest charges at tax time. 

Taxpayers should evaluate paycheck withholding every year, particularly in years with big life events. Changes such as a new job, marriage, children, and buying a home can affect your tax bill. Various financial transactions that occur towards the end of the year, like holiday bonuses and stock dividends, can also create unexpected tax impacts. 

You can coordinate your tax withholding with retirement plan options such as individual retirement accounts (IRA) and employer plans like a 401(k).  

2. Businesses Can Determine Taxable Position Before Year End

Pass-through entities pass the tax liability through to the owner of the company. Each owner may be responsible for quarterly estimated income tax payments.

A check up prior to year end can plan for deductible expenditures that can reduce  tax liability, such as equipment purchases that qualify for depreciation.  Other business strategies may be available to manage taxable income.

3. Know Before You Owe

At the least an income tax checkup can inform you of your projected tax liability and you can budget  accordingly. 

The team at Selph and Friday, CPA, helps small business owners and individuals alike take control during the tax season. From income tax preparation to bookkeeping and more, they can guide you successfully through deductibles and other intricacies of your tax filings. For more information about this Texarkana, TX, CPA firm, visit their website or call (903) 792-0281 today.