IRS issues notice for millions of Americans – They must do this before the end of the year

Nearly all employees pay payroll taxes. This is one thing that all employed individuals have in common. Asking how much you pay in taxes is a different matter entirely. To pay the bill, you must therefore determine the precise amount of your monthly income that must be set aside.

Since taxes must always be paid, many people decide to adjust their annual tax payments to avoid unpleasant surprises when the 2024 tax season begins.

It is far worse to have to pay a few extra dollars each month than to have to cope with a hit of several hundred or even several thousand dollars all at once when you file your tax return.

Although it feels like the new year is still a long way off, December has arrived, meaning it is nearly too late to adjust your tax liability.

Although it is too late to do so for 2024, if you are underpaying, the same issues may arise in 2025. Therefore, now is the moment to discuss your tax payment amount with your boss.

How to calculate how much in taxes you owe the IRS

One tool on IRS.gov that assists individuals in ensuring that all of their withholdings are accurate is the Tax Withholding Estimator.

This tool is particularly helpful for those who owed taxes or received sizable refunds last year, as well as for those whose lives have altered due to marriage, divorce, or the birth of a child, they said in a statement.

The tool allows you to determine the appropriate amount of federal income tax to be withheld, determine how the amount withheld will impact your refunds, take-home pay, or taxes owed, or select an estimated amount that suits your needs.

It can be challenging to recall the precise amount you owe because federal income taxes are deducted in varying amounts from each paycheck.

Even if your employer ought to be able to provide you with a reasonable estimate, some might have decided to pay you more during the year and then impose a hefty penalty on you when it comes time for taxes.

Tax brackets are the foundation of the federal income tax system. According to the IRS, when your income increases, so does the tax rate on the subsequent income level. When your income rises to a higher tax band, you do not pay the higher rate on all of it.

You only pay more for the portion that is in the new tax bracket. They can be challenging to identify because of this.