How To Get An Instant Pay Raise
As a gentleman was leaving my class recently, he wanted me to clarify something I had said. He was making sure that he should take his four or five thousand dollar tax refund and pay off debt.
I was stunned. This money represented $400-$500 that could have been in his pocket every month. A survey of my friends this week revealed one who was getting back $2800 and one getting $3300 back this year.
Getting a large tax refund (over $500) means you are having too much money withheld from your check every pay period.
Many people use this as a forced saving plan and it does not make any sense. You are loaning the government YOUR money, interest free. Every $1200 in refund is an extra $100 per month you could have used to eliminate debt or invest for your future.
I 'd venture to say that most people who do get large refunds could use this money every month to ease their debt burden. This burden frequently leads to late charges and higher interest rates. Instead, they like the feeling of getting that big check in the mail and figuring out how to spend that chunk of money.
The ideal situation is to either owe or get back $100.
If you get a big tax refund then you should adjust your allowances. The more allowances you claim, the less money is withheld from your check for taxes. It generally does not matter how many allowances you claim. If the government gets it's money they really don't care how many allowances you claim.
Here is how to get it right. Take the time to complete the appropriate worksheets included on Form W-4. The worksheets will help you determine your withholding allowances based on your income, adjustments, deductions, exemptions and tax credits. The worksheets can help you figure the right amount so you don't have too little withheld.
The IRS now has a calculator on their website which you can now access anytime at: http://www.irs.gov/individuals/article/0,,id=96196,00_business_personal_taxes.php
If you need help ask your payroll administrator at work or an accountant.
Keep your money working for YOU!
Leo J. Quinn, Jr. owner of http://www.LeoQuinn.com is a financial educator from the Albany, NY area. For over eight years he has been helping thousands of people get control of their finances and get out of debt in a fraction of the normal time. He has a special offer for readers of this newsletter at http://www.1shoppingcart.com/app/adtrack.asp?AdID=132551
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MORE RESOURCES:
 ABC News | IRS offers help paying taxes Washington Post When you have 140 million individual tax returns, "you need to be continually looking at ways to serve people," Shulman said. "This effort continues my ... Time Is Running Out to Collect 2006 Refund Record Number of Tax Filers Owed No Taxes in 2008 IRS Waiting For Claimants To $1.3 Billion Tax Refunds For 2006 |
 Richmond Times Dispatch | Time to go home; bills on taxes, schools and more were completed Henderson Gleaner INDIANAPOLIS — Businesses got a breather on taxes. Schools won authority to shift some extra dollars into the classroom. Taxpayers received the right to ... Local lawmakers back sales tax increase Bolling wades into rules dispute Gregoire calls special session for Monday |
 Boston Globe | Social Security to start cashing Uncle Sam's IOUs The Associated Press For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year. Not anymore. ... Boomers' retirement offers opportunities, challenges Social Security to start cashing government IOUs |
Govt to release tax review by May budget Sydney Morning Herald The biggest review of Australia's tax system in more than 60 years will be released within two months. Treasurer Wayne Swan announced on Sunday the ... |
Condo buyer's welcoming gift: Bill for taxes owed by developer Chicago Tribune Kenya Merritt has no problem paying the property taxes on her Austin neighborhood condo, but she isn't keen on paying taxes for the developer. ... |
 The Star-Ledger - NJ.com | Christie will propose constitutional amendment to cap tax hikes The Star-Ledger - NJ.com In a budget address on Tuesday, Christie will seek to limit annual tax hikes. TRENTON -- Gov. Chris Christie will propose a constitutional amendment ... |
Another sneaky Queen's Park tax attempt: Sa Toronto Sun Di Novo calls it a “novel idea” that will not cost any tax dollars. Excuse me? Why shouldn't affordable housing come from our tax dollars? ... |
Marois blasts premier on his integrity Montreal Gazette Proposals put up for discussion included tax measures, like the elimination of payroll taxes, favouring consumption taxes over income taxes and lower taxes ... |
 Salon | Legislative push aims to tax Internet sales in California Sacramento Bee Most Californians probably don't know they're supposed to keep track of all those online or catalog purchases and declare them on their state income tax ... Tax laws need to be fair to small business New tack for taxing online sales Amazon.com Tactics Draw Harsh Criticism |
New Hawaii law lowers huge unemployment tax hike BusinessWeek Businesses in Hawaii are getting immediate relief from the nation's largest increase in unemployment taxes after Gov. ... Lingle signs bill lowering unemployment tax increase |
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