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It's Time To Think About Your Taxes
Yes, I know that tax time has passed for most of us.
I also know that most of you anxiously await that W2
form each year so that you can take it straight to a
tax preparer anticipating a big refund. In many cases
this could be costing you a bundle.
Did you know that you can put that tax refund in a
savings or other interest bearing account throughout
the year?
Why not get that money in your paycheck instead of
allowing the government to keep it for a whole year
interest free.
Even if most of your refund is a result of the Earned
Income Credit you can still receive it in your paycheck.
I just recently completed my Son-in-Laws W4 form
(Employee's Withholding Allowance Certificate 2004) for a
new job. There are 5 in his family. He was able to
claim 11 exemptions, legally. This means that he will
have very little Federal Income Tax withheld from his
check.
Why would you want to do this and deprive yourself of
that Big Tax Refund?
First, you may need to use the money right now to pay
down your debt. For some people, this could add $50 to
$100 a week to there paycheck.
Second, if you are struggling to make ends me you need
the money now.
Third, you could add that much more to your 401k or other
retirement account.
If you would like to receive more of your money in your
paycheck all you need to do is fill out another W4 and
claim as many exemptions as possible. Just ask your
employer for another W4 and read it carefully. Make
sure you get the 2004 form because the form has changed
since 2003.
You can also print your own form and even fill it out
on your computer. To do this just go to http://www.irs.gov .
Click on "Individual" in the left column. On that page
click on "Forms & Publications". Scroll down to "Fill-In
Forms". In the forms box find "2004 Form W-4 Employee's
Withholding Allowance Certificate". Click on the link
that shows up and the form will open and allow you to
enter your information.
If you qualify you can do the same thing with your Earned
Income Credit. The only difference is that you will need
to complete the "Earned Income Credit Advance Payment
Certificate" Form W5. Check IRS publication 596 to see if
you qualify.
It's your choice. You can choose to give the government
a free loan each year or get that money when you most
need it, NOW!
About The Author: Terry Rigg is the author of Living Within Your Means - The Easy Way http://www.homemoneyhelp.com/ebookadpage.html and editor of The FREE Budget Stretcher Newsletter and Budget Stretcher web site http://www.homemoneyhelp.com. He has 25 years of experience counseling individuals and families concerning their personal finances.
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