Maximise Your Tax Income

In: Business and Management

Submitted By tanou3
Words 767
Pages 4
Fatten Your Paycheck and Still Get a Tax Refund
Updated for Tax Year: 2012
Share this article: inShare3 If you usually get a tax refund, but would like to start putting more money in your pocket every month, we can help. Yes, you still have to fill out a W-4 form. But we've developed a quick and easy guide to assist you.
Could you use more money in your pocket each month?
The average tax refund for 2008 was more than $2,850.
That means, on average, taxpayers who get refunds let the IRS take about $240 more out of their paychecks each month than the government deserves.
But here’s the good news: You can put an end to that over withholding, fatten your paychecks and still get a tax refund at tax time.
All you have to do is file a revised 2012 W-4 Form with your employer. The information on the W-4 determines how much federal income tax is withheld from your checks.
The more “allowances” you claim on the form, the less tax is withheld from your pay.
How do you know how many allowances to claim so that your withholding matches your tax bill? Worksheets that come with the W-4 will help. You can also use the IRS Withholding Calculator.
Try this quick method for adjusting your W-4
We’ve come up with an easier way to learn how many extra allowances you should be claiming.
This method assumes that your financial situation is similar in 2013 to what it was in 2012. And, for most taxpayers, that’s a pretty safe assumption.
Using Table A below, find your filing status and income in one of the first two columns. Then, find the corresponding figure in the third column labeled, "Annual Value of Each Withholding Allowance."
Then divide the amount of your last year's refund by that figure.
The figure is the annual value – in terms of reduced withholding and higher take-home pay – of each allowance you claim. Say, for example, that you’re single and expect your…...

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