Page 22 - Escape Your IRS Nightmare Flip Book

We have worked with thousands of people who owe money to the IRS and have resolved millions of
dollars in taxes owed, and so we urge you to take our next piece of advice based on that experience –

First you need to understand that you have to start somewhere.

We want you to start by doing this one thing: Understand that the money you owe to the IRS is your
“old” problem. What we need you to do instead is focus on the future and what you can control.

Let’s start with today and the income you are earning right now.

Are you earning W2 income? If yes, we need to make sure that you have the correct amount of
withholding coming out of your paycheck. The easiest way to determine if your withholding is set up
correctly, is by making sure that you are claiming the same number of dependents on your W4 form

that you will claim on your tax return. The W4 form is an IRS form that all individuals have to fill out
and submit before they can begin receiving a paycheck. If you claim too many exemptions on your W4

form, you will owe taxes on your tax return.

Here’s another tip - do not write “EXEMPT” on your W4 form or indicate you are exempt from taxes

on the W4 form unless you have received a letter from the IRS reflecting that you are in fact exempt or
your income falls within a certain classification that qualifies as being exempt.

Next: Are you self-employed? If you are, then we need to talk about making “Estimated Tax
Payments”. If you have never done this before, don’t worry, it’s nothing fancy.

If you are self-employed and are making about the same amount of money you made last year, we can
start by taking the amount of money you owed last year and divide it by 4.

For example, if you owed $20,000 in taxes last year, divide that number by 4, and that equals $5,000.
This means you should pay $5,000 each quarter to the IRS.

You should divide the taxes you owed last year by the number “4” in order to make an “Estimated Tax

Payment” each “quarter”.

If you don’t know what a quarter is, I will break it down right here. The twelve months of the year are

broken into 4 periods. Each of those 4 periods is called a quarter.
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