Give Yourself (not Uncle Sam) a Christmas Bonus
If I told you to think about your taxes right now, you’d probably ignore me.
I get it. You’re thinking shopping, traffic and how to get out of the holiday office party.
Certainly not taxes.
But do yourself a favor, pour some coffee, or maybe a stiff drink -- and take a minute to consider the following. Otherwise you may regret it when the spring rolls around and you owe Uncle Sam a big, fat check. Or even worse, he owes you one.
There are three simple things to look at before year end, that I promise will make tax-time way less painful. We’ll start this week with the first.
So this week, pull out your W-4 (http://www.irs.gov/pub/irs-pdf/fw4.pdf).
If you are someone’s employee, you know the form I’m talking about -- you filled it out when you first started your job where you had to tally all those silly ones, and it determined how much tax should be withheld from your paycheck.
Granted, you probably haven’t seen it since that first day of work, but if you are paid weekly or bi-weekly, it’s the quickest way to adjust your upcoming tax bill.
So start to ask yourself some questions. If you got a big tax refund last year -- like over $1,000 – why should Uncle Sam get to play with your money all year? Why not give yourself a Christmas bonus and go reduce the amount of taxes withheld for the rest of the month? We can all use a little extra holiday money.
On the flipside, if you owed more than 10% of your total tax bill last year and life has not changed, you may want to have extra money withheld for the next few weeks.
I know that sounds like bad timing, but again, a little change today will make April 15 much less agonizing.
Now think about your life. What happened this year?
• Did you or your spouse change jobs?
• Did you get a second job?
• Were you unemployed for part or all of the year?
• Did you got married or divorced?
• Did you have a baby or adopted one (yay!)?
If any of the above happened to you, get up now and go see your human resources manager.
And here’s a little insider’s tip: If you need to have extra money withheld and you know the exact amount, you can just plop the number on line 6 of the form and forget about those pesky “1s”.
Doesn’t get much easier than that.
E-mail Tracy your tax questions at tracytaxtips@gmail.com.