Volume 1, Issue 2
Are you giving the government interest free loans?
Precisely how are you planning on spending or investing your current tax return? Would you like to utilize it to take a trip? Or were you planning on possibly obtaining anything major such as that big screen TV? Have you already been holding out for that perfect time to get what you have always wanted? Does your tax refund each year always give you significant ideas on how to spend “that money?”
If that is the case, you actually are not alone. Almost every American that obtains a significant tax refund each year usually gets excited about getting this kind of “free money” back from the Internal Revenue Service (IRS). What you should recognize is that any income you receive from your tax return is not usually a good reason to rejoice. The reason, this amount of money is not extra money the IRS is paying out to you by the government or “free money” you receive by paying your income taxes punctually. A tax refund simply derives from you overpaying the amount of tax you owe the government each year.
Any type of tax reimbursement you receive from the federal government is the result of overpaid taxes you gave the IRS during the prior year. The most detrimental component of all of this is the fact that the U. S. Government makes use of your overpayment of taxes without having to pay you a single penny of interest.
The true reality is that can make use of this “extra cash” you are having to paying into the government all year long. The best solution is to pay just the correct amount of tax you truly owe the IRS each pay period, so there is no “extra” money left over. By doing this, you will actually obtain more money each month to live on simply by paying the correct amount of tax you owe each month. Have you ever thought about how hard you already work and how much of that hard earned money goes toward paying taxes? Would you like to increase your salary each month simply by ensuring that you are paying the proper amount of tax every month, rather than allowing the IRS to use your money for most twelve months free of charge?
You can easily give yourself a tax-free boost! We have seen people get as much as $350/month back each month, simply by reducing the total amount of money withheld out of their take-home pay. All of this is fairly easy to do, simply by ensuring you have filled out what is called your W-4 form properly. Anyone who is employed by a company can easily obtain this W-4 form from your employer.
If you do receive a large income tax refund each year, inquire within your company for a new W-4 form to fill out. From here, you will need to change the number of withholding allowances you are generally declaring. When you increase allowances on your current W-4 form, your own salary will get larger simply because a smaller amount of taxes is then taken out of your paycheck. Conversely, whenever an individual decreases the number associated with allowances, your salary will get scaled-down due to the fact a lot more of income tax is actually withheld.
You may lawfully increase the amount of allowances you claim to help you with your own W-4 methods. This will then permit a person to separate the dollar amount owed to the IRS each pay period. Remember, you would not owe them any monies above the amount of allowances you are able to deduct.
The Internal Revenue Service (IRS) offers many forms including the W-4 form as well as additional publications on their website to help you calculate the correct amount of allowances you are able to take each year. That website is: www.irs.gov. To obtain help with your W-4 form simply go to this web site and in the “Forms & Pubs” section on the left side of the site, you will see the W-4 form. Double click this on and you will have all the information you need to correctly complete you update W-4 form. (Note: To download this document you will need to have the Adobe Acrobat reader in order to open this document. If however if you do not have that, a free copy of the Adobe Acrobat reader can be obtained by going to: www.adobe.com/reader.)
The actual worksheet provided together with the W-4 form will be beneficial in determining the correct number of allowances you should claim on your personal W-4 form. This way, at tax time you should not owe the government any money, nor should they have to refund you any money. With that is mind, you never want to “guess” or just increase your allowances without basing the decision on fact… if you do, you may end up owing the IRS more money the next time you complete your annual taxes, as well as face the possibility of paying a fine.
The particular method regarding working out how many allowances for you to declare basically functions like this: For every $2,000 in tax breaks you already have or develop (for example company costs, home loan interest, healthcare expenses, etc.), an individual ought to include a single additional allowance in your current W-4. Revise your current W-4 as frequently as needed because your current monetary circumstances could change each year.
Bear in mind, in the event that the amount associated with allowances to which a person will be entitled decreases, that person will be required to file an entire new W-4 in a matter of ten days. Nevertheless, in the event that the actual number rises, nobody is required to inform an individual. A person will be liable for making the determination of whether you should alter your allowances. In the event that a person have any kind of difficulties calculating through your own withholding as well as exactly how many allowances anyone may declare, consult a tax consultant with regard to support.
In addition, you are able to alter your own allowances and also improve your own paycheck; the subsequent concern for you to question yourself is just what you will do with the extra funds you may have available to you? At Nationwide Debt Reduction, Inc., and as a pro-active debt settlement company, we highly recommend that you utilize these “new monies” to allow our debt negotiators to settle your unsecured debt and credit card debt reduction as soon as possible. This way you will get your own credit card debt paid off as quickly as possible.
Keep in mind, not all of us will be able to produce additional monies by properly utilizing the government’s W-4 form. However, any time a client can add additional monies into their account with us, you will experience becoming completely debt free in a much shorter time than originally planned. However, it will certainly help you get through the actual program much more rapidly. One more thing to keep in mind. When you complete our debt settlement program and become completely debt free, you can use those monies to pay off your secured debt. Either way, your ultimate goal regarding becoming financially debt –free can be realized.
Look for our next newsletter there we will discuss the importance of budgeting.
Nationwide Debt Reduction, Inc.