Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
This year feels like it has zipped by quickly. Here we are, deep into September—the perfect time to review your finances, prepare for tax season, and figure out whether you’ll need to adjust your tax withholding.
By this time, you’ve earned three-quarters of the year’s routine income. You likely have a pretty good idea of your prospects for the rest of the year, and you still have more than three months to make revisions and adjustments. There is plenty of time for you to take action to improve your situation—if you know where you stand financially.
Step 1: Figure out your financial situation.
It’s time to re-balance your tax life. Pull together the numbers for this year and ask yourself these questions:
Interest, dividends, and capital gains may be easy to predict—unless you’ve been engaging in heavy day trading. If that is the case, start pulling the reports and summaries to help determine your profits or losses.
Earnings from partnerships, trusts, S corporations, and other pass-through entities, on the other hand, may be more difficult to forecast. You may want to make a few phone calls and ask for the managers so you can figure out some idea of this year’s expected pass-through income and credits.
Remember to make a summary of your key expenses, such as mortgage interest, property taxes, donations, investments, and business expenses.
Step 2: Project how much money you will owe.
In order to accurately predict how much you’ll owe in taxes, you may want to use a software program like TurboTax’s TaxCaster or H&R Block’s Tax Estimator. (Although these are designed for 2012, most of the numbers, aside from the medical expenses, will be similar for 2013.) Many of the online tax software programs will let you enter information without charging you, but you will have to pay if you want to print out the data or file the return.
This means you can use the full power of a tax program to enter information as if you were about to prepare your 2013 tax return. Doing so will allow you to include things like self-employment taxes and alternative minimum taxes that the free projection tools might miss.
Step 3: Decide how you will pay what you owe.
If you find that you’re going to owe more money, there are two ways to pay it. You can increase your payroll withholding, or you can start making or increasing your estimated tax payments.
When the payments are made via increased withholding, the IRS treats them as if they had been made on time during the year—a good trick to avoid penalties if payments should have been made in April and June.
As long as you can afford to pay the additional taxes between now and April 15, there’s no problem. The problem arises when you’ve made a lot of money, but you don’t have any left to pay your taxes.
Now what? It’s time to talk to a tax professional.
The advantage of working with a tax pro is that, in addition to figuring out whether or not you should increase your withholding or estimated tax payments, you can get advice on how to reduce your taxes or how to raise the funds you’ll need to cover them.
If you’re self-employed, one thing you can do while you still have time is make a big marketing push either before the end of the year or in early January to raise the cash you’ll need. If you’re an employee, try doing something spectacular to help your company and earn a bonus. You may also want to consider a part-time job to generate the extra funds.
Eva Rosenberg, EA is the publisher of TaxMama.com, where your tax questions are answered. She is the author of several books and ebooks, including Small Business Taxes Made Easy. Eva teaches a tax pro course at IRSExams.com and tax courses you might enjoy at http://www.cpelink.com/teamtaxmama.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.