Tax Season Winds Down
Owe Taxes to the IRS? Review your W4 tax withholdings now!
April 15th has come and gone, and unless you have filed for an extension, a copy of your completed tax return should be tucked away in your file cabinet for the next seven years. Here at Capstone’s six Volunteer Income Tax Assistance (VITA) sites, we filed tax returns for nearly 1100 Vermont families from February through April. This free service for families making less than $53,000 per year helped put more than $2,000,000 in refunds and credits directly into the pockets of many low income central Vermonters. This money comes back to our community as many people report using their refunds to repair or buy a new car, shop for clothing for their children, or deposit to their savings accounts for future expenses. In addition to the IRS and Capstone’s Community Services Block Grant, we received a generous $10,000 grant from the National Life Group Foundation in Montpelier. This support helped pay for a seasonal full-time staff member for Capstone’s VITA program and two very part-time site coordinators who train the volunteers and assist in program management. This valuable tax filing service would not be possible without our generous sponsors. Thank you, National Life Group!
If you were one of the millions of Americans who owed money to your state and/or federal government, now may be a good time to review your W4-Employee Withholding Allowance Certificate to make sure you are having the correct amount of tax withheld from your paycheck. While it’s good to update your W4 when you have a major life change such as marriage, divorce, or a job promotion with higher pay, it’s also important to revisit your W4 certificate if you have multiple places of employment. In Vermont, many people have more than one job to help them make ends meet. If a single person with no children makes $30,000 at their main job and has the appropriate amount of taxes withheld, they should be all set come April 2016—hopefully not having to pay any taxes out. If that same person has a second or third job, making only several thousand dollars at each job, it’s crucial that they enough withheld from their smaller jobs because the IRS considers multiple sources of income when determining gross income. Thankfully the W4 instructions explain how to withhold taxes based on your specific circumstances, but be sure to follow the steps to ensure that enough taxes are withheld at your part-time jobs. If you discover that indeed not enough taxes are being removed from your paycheck, it’s not too late to remedy the situation for the current tax year. The instructions also explain how to make up for the months that you were not having enough taken out so that by the time your last paycheck rolls around in December, you will have paid enough for the year. So, if you’re concerned that you’re not having enough taken out for taxes, head straight to your employer and request a new W4 form so that you aren’t surprised next April!