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In a crucial update, the Internal Revenue Service (IRS) is sounding the alarm for taxpayers to review their tax withholding without delay, aiming to prevent unforeseen complications as the year comes to a close. Taxpayers are urged to take action to avoid surprises such as significant refunds or outstanding balances in their 2023 tax returns.

IRS’s Urgent Warning

The IRS emphasizes the importance of promptly assessing tax withholding, even in these final weeks of 2023. While early reviews are ideal, last-minute adjustments can still make a difference in avoiding financial shocks during tax season.

Tax Withholding Estimator: A Vital Tool

Taxpayers are encouraged to utilize the Tax Withholding Estimator, available in English and Spanish, to calculate their income tax withholding based on individual circumstances accurately. This user-friendly tool caters to workers, retirees, and self-employed individuals, ensuring precise withholding calculations.

Quarterly Payments Advised for Certain Incomes

Taxpayers are advised to make quarterly estimated tax payments for incomes not subject to withholding, such as rental earnings or gig economy work. This proactive approach helps avoid penalties and outstanding balances. Payments can be conveniently made through various methods, including mail, online platforms, phone, or the IRS2Go app.

Life Events and Other Triggers

The IRS highlights that significant life events, including marriage, childbirth, job loss, and natural disasters, can necessitate withholding adjustments. Special tax provisions exist to assist individuals and businesses impacted by disasters, offering essential financial support.

Refunds Not Guaranteed: Proper Withholding is Key

Taxpayers are reminded that a tax refund is not guaranteed. Individuals can increase their take-home pay by making appropriate withholding adjustments instead of waiting for refunds later. The fastest way for eligible people to receive a tax refund is by filing electronically and opting for Direct Deposit, with refunds typically issued within 21 days.

Stay tuned for further updates on this critical tax advisory as the year draws closer.

Source (IRS News).