VIVID Tax & Business Solutions

If you do not file by October 15th, you will have to wait until the end of January to file again!

📘 How to Fill Out Your W-4 Correctly

One of the biggest issues we’ve seen over the past few years is that W-4 forms are not being filled out properly. This mistake often leads to either underpayment (owing at tax time) or overpayment (big refunds that could have been in your paycheck all year) 🚨🚨🚨

Here’s a quick breakdown ⬇️

✅ Step 1 – Filing Status
Choose your status: Single / Married Filing Separately or Married Filing Jointly.
👉 If you’d like a higher amount of taxes withheld, you can select Single/MFS even if you are married.
⚠️ Avoid checking Head of Household here—it can cause under-withholding.

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✅ Step 2 – Multiple Jobs / Spouse Works
Check the box in 2c if:
• You have more than one job, or
• Your spouse works, or
• You have extra income (investments, side hustle, etc.), or
• You tend to owe taxes at the end of the year.

💡 Pro Tip: Checking this box increases your withholding to pre-2017 levels, which helps prevent underpayment.

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✅ Step 3 – Dependents

• Multiply the number of qualifying children under age 17 by $2,000
•Multiply the number of other dependents by $500
•Add them together (and include any other credits if applicable).

👉 Example: 2 kids under 17 = $4,000. One additional dependent = $500. Total = $4,500.

⚠️ Recommendation: To avoid underpayment, consider putting fewer dependents here than you actually have (e.g., if you have 2, put 1). This allows more taxes to be withheld, and you’ll get any extra back at tax time. But consult with Tax professionals

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✅ Step 4 – Other Adjustments
• 4a & 4b → put 0
• 4c → Extra withholding: If you’re still ending up with a balance due after following the steps above, you can add a flat amount here to be withheld each paycheck.

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🛑 Important Tip for Married Couples:
Don’t forget to review your spouse’s W-4 as well! Both sets of withholdings work together, so adjusting just one may not be enough.

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✨ Always consult with your Tax Professional to make sure your W-4 matches your personal tax bracket and situation. A little planning now can save you stress later!

Self Employed Folks:🚨🚨🚨

The reason why Your tax REFUND isn’t as high as someone with a W2 because you are SELF EMPLOYED…..

Self-Employment Tax:

📍Self-employed individuals must pay the self-employment tax, which covers Social Security and Medicare.

📌Rate: 15.3% (12.4% for Social Security + 2.9% for Medicare).
State of Illinois: 4.95%

📍W-2 employees only pay half (7.65%) of this amount because their employer pays the other half.

📎Self-employed people pay both halves, increasing their tax liability 😬

Example: If both earn $50,000:

📌W-2 employee’s Social Security and Medicare share: $3,825.

📌Self-employed individual’s Social Security and Medicare share: $7,650.

Because MOST self employed/gig workers don’t pay their taxes in real time like they should the refund is reduced by the self employment tax liability.

IRS Refund Update:

For taxpayers that claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC), the IRS has announced they can expect their refund by March 3, 2025, following the lifting of the PATH Act.

We know refunds may be released earlier, but this is the official timeline for now.

When to expect your refund if you claimed the Earned Income Tax Credit or Additional Child Tax Credit | Internal Revenue Service Find out when to expect your refund if you claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC).

🚨 Important Tax Updates Under President Trump’s Executive Orders 🚨

Here’s what’s happening with the IRS and global taxes that could impact tax pros:

1. IRS Hiring Freeze 🛑
President Trump signed an executive order to freeze hiring at the IRS. This means no new IRS workers, including temporary hires for tax season, unless necessary for national security or public safety. This could slow down processes at the IRS during the busiest time of year for tax professionals.

2. Tip Tax Exemption 💵
Trump is also pushing to remove taxes on tips. While no official executive order was signed yet, he’s mentioned it as a major goal. This would be a game-changer for workers who rely on tips, like restaurant servers.

3. Global Tax Deal Reversal 🌍💰
Trump is backing out of the OECD’s Global Tax Deal. The OECD (Organization for Economic Cooperation and Development) is a group of 38 countries that work together to create global tax rules. The deal aimed at setting international tax rules to ensure big companies pay their fair share in every country they operate. Trump’s move could affect how American businesses are taxed globally, reducing some international tax pressures on U.S. companies.

What does this mean for tax pros?

• Hiring Freeze could delay IRS responses and temporary worker availability.

• Tip Exemption could lead to changes in how tip-based income is reported in the future.

• Global Tax Deal Reversal could impact how multinational companies handle their taxes internationally, possibly easing burdens for U.S. businesses.

Stay tuned for updates on these changes, as they could impact your clients and your tax filing practices. 💼💡

Important Tax Tip:

Tax returns are already being rejected because some people with health insurance from the marketplace haven’t downloaded their Form 1095-A from Healthcare.gov.

If you had marketplace insurance for even one day, you must include this form to file your tax return electronically. If you don’t, your return will be rejected.

Many people forget they had marketplace insurance or didn’t officially cancel it, but you still need to report it. To get your Form 1095-A, visit Healthcare.gov or call 1-800-318-2596 to request it.

On behalf of the tax professional community: Please check for this form before filing your taxes! It’ll save you time and frustration.

Welcome to the Health Insurance Marketplace® Welcome to the Health Insurance Marketplace®. Official government website.

W4 Education

How To Fill a W4

One of the biggest issues i have been seeing these past years is the W4 forms aren’t being properly filled out which is leading to under payment of taxes throughout the year and in some cases over payments (ending up with a balance) 🚨🚨🚨

✅ If you’re a W2 employee, you have total control over using your W4 form to declare your exemption and federal tax withholding. Here’s how to properly fill out their W4 form.

Step 1 - is your filing status. You would enter Single/Married Filing Separately or Married Filing Jointly. If you would like a higher rate of taxes taken out, you could check the Single/MFS box even if you are married. I do NOT recommend checking the Head of Household as you may be under-withheld which results in a much lower tax refund.

Step 2 - Is for Multiple Jobs or if your Spouse Works. You would check the box in 2c if there is another job on your return besides the one for which you are currently filling out the W-4. You would also check this box if you have a spouse with a job, investment income or you are owing at the end of the year even with your one job. This checkbox brings the withholdings back to the pre-2017 Tax Cuts and Jobs Acts withholding tables when the withholding was higher. I recommend checking this box.

Step 3 - Is for dependents. I recommend putting 0 in this box (If you have 2 dependents, put 1) it allows more taxes to come out, so you don’t under pay and owe come tax time. If you over pay, you will receive this amount back come tax time.

Step 4- Is for other items. I recommend putting 0 in 4a and 4b. 4c is for extra withholding, a flat amount to take out of each paycheck. If you are already doing the above steps and still owing money, it would be a good idea to put an extra amount in this box that you would like withheld each payday.

🛑 If you are married, it would be a good idea to revisit your spouse’s withholdings as well‼️The Married option is not always best if you are in a higher tax bracket.

Always check with your Tax Professional to see what is best for your tax bracket and tax situation!

Need help with your W4 or paying quarterly taxes for your business?
VIVID Tax & Business Solutions will be happy to assist you.

Thank Me later 💜🤑🤑😎

🚨 2024 EITC Update! 🚨

Amazing news for hardworking families! The Earned Income Tax Credit (EITC) amounts have increased for 2024, bringing more relief to those who qualify. Here’s the breakdown:

No qualifying children: Up to $632 (up from $600 in 2023)

1 qualifying child: Up to $4,213 (was $3,995 in 2023)

2 qualifying children: Up to $6,960 (was $6,604 in 2023)

3 or more qualifying children: Up to $7,830 (was $7,430 in 2023)



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Official start date January 27th, 2025!!

🚨ATTENTION🚨If you have an active LLC or Corp you MUST file a BOI report by Jan 13th or you will be penalized up to $500/a day! Contact us and let us help you get this filed for your business!!