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Also find out who would benefit most fromPresident Trumps Social Security tax plan.
If you file late, the penalties are 5% of the tax owed per month.
Early payment protects your hard-earned retirement income from being eaten up by extra fees.
Its very stressful and could throw off your entire budget.
When youre living on a fixed income, that surprise tax bill can seriously derail your financial plans.
Paying early gives you peace of mind and makes it easier to plan ahead, Carlson added.
Once garnishment starts, it doesnt stop until your full tax debt.
This includes interest and penalties until its paid off.
Thats money you could be using for housing, groceries or medical care.
Carlson said its always better to be proactive with your finances andtax planning process.
Withholding Options
You dont have to wait until April to deal with your taxes.
Brummond recommended an underused but powerful strategy: withholding taxes directly from your Social Security payments.
To do that, file Form W-4V, Voluntary Withholding Request, she explained.
The SSA will then withhold taxes from each payment.
This method helps you stay current with your taxes year-round and could even lead to a refund.
Even if youre due a refund, dont let that make you lazy, Carlson said.
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