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Posted by: Charles P Myrick CPA Posted on: Jan 07 2020 Posted in: tax savings, tax refund, personal finance, wealth building

Personal Finances Tip: Don't Overpay Your Taxes

In order to save money you may do your own personal income tax every spring. While that might seem like good money management, there are a lot of ways you can pay too much without knowing it. Read on to learn a few signs that may indicate whether you are paying more than you need to.

Six Signs That You May Be Paying Too Much

  1. Large refund checks – You might be happy to get a large tax refund check every spring, but the truth is you are still losing money in the long run. When you overpay on your individual taxes by having too much withholding on your paycheck, you are giving the government an interest-free loan. You’d be better off keeping the amount due you and investing it yourself.
  2. A new spouse – If you’ve gotten married or otherwise changed your life status but not changed your withholding forms, you are likely missing out on tax benefits. Marriage brings its own tax break, and may offer more relief per state you file in.
  3. Your W4 hasn’t changed or updated in years – When you were first hired in your current company, the HR department had you fill out some paperwork. One of the forms is the W4, tax withholding sheet. Changes in your tax status could go in your favor if you make sure to update the form annually. 
  4. Charitable giving increased One of the ways to offset your tax burden is to increase charitable giving. By giving to your favorite charities, you will increase your itemized deduction which will lower your taxable income and allow you to pay less in taxes. This can free up your money to do other things such as acquiring assets. If you’ve started giving to a non-profit organization since your previous tax period, you may be able to reduce your tax withholding so you do not pay too much in taxes.
  5. Job change – Did your job change and you never got around to updating your W-4? Make sure you review and update your withholding amount (W-4) with your human resource administrator when your compensation changes. This is important to do, even if the change includes an increase in benefits with little or no increase in pay.
  6. Tax laws change – You may not always be aware tax laws have changed or that the new law may give you a lower tax amount. Let a professional CPA analyze your return to make sure you are getting all the benefits of a new tax law.

Don’t leave your own money on the table by trying to save money! An expert can plan and prepare your taxes. Myrick CPA will make sure you get the maximum return. Get in touch with us today.

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Charles P Myrick CPA offers tax preparation for individuals and small business owners using a process that combines smart, personalized planning with annual tax preparation and filing. Our job is to help you know about all the available tax opportunities that meet your individual needs and circumstances. We work closely with tax lawyers, and investment advisors to ensure that all the details are legally sound, technically accurate, and working to your maximum benefit. Contact us to learn more: (202) 789-8898