Many of you know that I continue to preach about the benefits of planning. Recently the Governor of Kansas announced that their state may not be able to pay tax refunds but will instead issue IOU’s.
Thanks to proper planning my clients don’t have to worry about their state not having the cash flow to pay them a refund. I prefer that my clients owe a small balance at year end that way they have the use of their own money all year long. I stress small balance because the penalties and interest charged by the federal and state governments can prove to be onerous.
Recently I was contacted by a client whose wife was re-entering the workforce. He wanted to be sure they were claiming the proper exemption amounts so there would not be a subsantial overpayment at year end. I ran some projections and came up with just the right amount of withholding. We also ran a “what if” projection to see the results had they claimed married, 2 exemptions. Good thing we did the planning. Had they filed as originally planned they would have had an unfunded tax liability of almost $ 4,000. I can assure you the state would not have accepted an IOU, they would demand cold hard cash along with some serious penalties and interest.
If you, or someone in your social circle is having a life changing event such as a marriage, divorce, job change or other event that could impact their income they need to seek advice on the tax impact of these changes. Have them give me a call at 678-624-4775 or email me at Peter@TarantinoCo.com.
Remember, surprises are for your birthday, not April 15th.