To prevent from owing taxes at the end of the year, it is crucial that you pay your taxes through out the year as you earn income. This prevents any underpayment penalties. If you are an employee you should fill out Form W-4 and report all your wages from work. Step 2 of Form W-4 has a wage estimator derived from the IRS website that can be used to calculate any income tax you might be liable for.
If you are not an employee and not subject to any withholdings you can make estimated tax payments. Use Form 1040ES and its accompanying worksheet to calculate your estimated tax liability and determine your quarterly payments. Pay your quarterly payments timely to avoid any penalties.
By taking these steps you can proactively mange your tax obligations and minimize the chances of owing at year end.
