… think about your adjustments.
Did you get a big tax refund this year? If so, that’s great… right now. But wouldn’t it be better to have that money all throughout the year?
I know that sometimes the answer to that is, “no”. If you’re a terrible saver, maybe it’s actually a good idea for you to let the government do your saving for you. But do know that, in that case, you’re saving without interest. And you also have to trust yourself to do something wise with that tax refund when it comes.
I’m a pretty good saver, and I have a ton of student loan debt. So it would be much better for me to have money throughout the year instead of a big refund. If you’re in that boat, here’s what you can do:
- Get your W-4. You may be able to access this online through your company’s billing software, or you may need to get a paper copy from HR.
- Change the number of allowances. Essentially, the higher your number of allowances is, the lower the percent of taxes that will be withheld from your check each week.
- Not sure how many allowances to claim? The W-4 comes with a worksheet that helps you figure it out, or you can use an online calculator to chose your ideal number if you think that 2012′s finances are going to be the same as 2011′s.
Remember that if you overshoot on your allowances, you may end up owing money next April. I’m certainly NOT a tax adviser, so you should get tax advice from an accountant if you’re unsure what number of allowances you’re allowed to claim.
It only took me about 5 minutes to adjust my allowances to the correct amount, and I’m looking forward to that weekly bump in pay. It’s going straight to my loans!
No related posts.