During tax-filing season, many look forward to refunds, but these represent overpayments rather than free money. An alarming Reddit post reveals someone owing over $10,000, highlighting a lack of tax awareness as a potential issue. Various reasons can lead to owing the IRS, such as insufficient withholding as a W-2 employee, underpayment as a 1099 contractor, or failing to claim eligible deductions. Financial professionals can assist individuals in managing and optimizing tax liability effectively.
A tax refund is actually not a good thing at all; it means you overpaid the IRS and are getting your own money back much later.
Being a W-2 employee or a 1099 contractor, failing to withhold or pay enough taxes, can lead to owing a significant amount to the IRS.
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