Advise Your Clients to Check Their Tax Withholding
IRS is reminding taxpayers to use the Tax Withholding Estimator
to adjust their 2023 withholding so that they don’t have too much or too little tax withheld. Checking now and making necessary adjustments early in the year may help taxpayers avoid the need for quarterly estimated tax payments.
Income taxes are "pay-as-you-go" and are normally paid throughout the year as income is received through withholding. However, having a second job, or non-wage income from unemployment, self-employment, annuity income, the gig economy or digital assets, may require taxpayers make quarterly estimated tax payments.
In addition, various financial transactions, especially late in the year, can have an unexpected tax impact. Examples include year-end and holiday bonuses, stock dividends, capital gain distributions from mutual funds and stocks, bonds, virtual currency, and real estate or other property sold at a profit. Read more here