Your withholding is the amount of money you have taken out of each paycheck to apply toward income taxes. When your taxes are filed at the end of the year, any amount that the Internal Revenue Service withheld is credited toward your tax bill. I, like many others, am unable to afford my own certified public accountant, and just hope that the amount withdrawn from my income will match up to the total taxes I owe. Usually that isn’t the case, but luckily, up until this point, I’ve only overpaid and earned a refund back from the IRS. Those who underpay end up getting a stiff bill, and may end up having to pay penalties as well.
According to the IRS, the average individual tax refund in 2012 was $2700. That calculates out to an average individual overpayment to the IRS of $225 per month. I have learned through a … Read the rest