How To Get An Instant Pay Raise

As a gentleman was leaving my class recently, he wanted me to clarify something I had said. He was making sure that he should take his four or five thousand dollar tax refund and pay off debt.

I was stunned. This money represented $400-$500 that could have been in his pocket every month. A survey of my friends this week revealed one who was getting back $2800 and one getting $3300 back this year.

Getting a large tax refund (over $500) means you are having too much money withheld from your check every pay period.

Many people use this as a forced saving plan and it does not make any sense. You are loaning the government YOUR money, interest free. Every $1200 in refund is an extra $100 per month you could have used to eliminate debt or invest for your future.

I 'd venture to say that most people who do get large refunds could use this money every month to ease their debt burden. This burden frequently leads to late charges and higher interest rates. Instead, they like the feeling of getting that big check in the mail and figuring out how to spend that chunk of money.

The ideal situation is to either owe or get back $100.

If you get a big tax refund then you should adjust your allowances. The more allowances you claim, the less money is withheld from your check for taxes. It generally does not matter how many allowances you claim. If the government gets it's money they really don't care how many allowances you claim.

Here is how to get it right. Take the time to complete the appropriate worksheets included on Form W-4. The worksheets will help you determine your withholding allowances based on your income, adjustments, deductions, exemptions and tax credits. The worksheets can help you figure the right amount so you don't have too little withheld.

The IRS now has a calculator on their website which you can now access anytime at: http://www.irs.gov/individuals/article/0,,id=96196,00.html

If you need help ask your payroll administrator at work or an accountant.

Keep your money working for YOU!

Leo J. Quinn, Jr. owner of http://www.LeoQuinn.com is a financial educator from the Albany, NY area. For over eight years he has been helping thousands of people get control of their finances and get out of debt in a fraction of the normal time. He has a special offer for readers of this newsletter at http://www.1shoppingcart.com/app/adt rack.asp?AdID=132551

In The News:

Tax Evasion  The Statesman
Income tax  India Legal

IRS Lock-In Letters ? What?s An Employer To Do?

Employers often ask employees to designate the amount of tax... Read More

Requirements To Produce Tax Information (Whats Up With That?)

"What we've got here is a failure to communicate." ... Read More

Are You Overpaying Taxes If You Use Tax Preparation Software?

For many business owners the answer to this quandary is... Read More

Small Business Tax Deduction - Write-Off Bad Debts

Practically every small business has receivables that it cannot obtain... Read More

Taxing Overseas Firms for SOX Compliance

The Sarbanes-Oxley Act, also called the Public Company Accounting Reform... Read More

Need a Copy of Your Tax Return Information?

Taxpayers have two easy and convenient options for getting copies... Read More

Access to E-records by Taxing Authorities: A Case for Pakistan (Part II)

All tax authorities to e-commerce transactions should investigate the record... Read More

How to Maximize Your Home Business Tax Deductions for 2005

Someone once said, 'the best way to calculate your taxes... Read More

Hurricane Katrina ? How To Use Your Business Loss To Get A Refund on 2004 Taxes

With the massive losses caused by Katrina, the economy of... Read More

How to Check the Status of Your Tax Refund Online

So, you were pleasantly surprised to learn that you are... Read More

The Tax Man Cometh... To Search

You're at your office, or home, and the doorbell rings... Read More

Save Money on Taxes - Let Uncle Sam Pay for Your Fun!

"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More

The Seven Deadly Tax Sins: Commonly Missed Deductions

It's that time again, the April 15 tax deadline is... Read More

Insider Guides to IRS Audits!

Ever wish that, as a business owner, you knew exactly... Read More

Tax Trap #1 -- Waiting to Incorporate: What A Difference A Date Can Make

NOTE: This is the first in a series of 5... Read More

Tax Time Tune Up

Excerpted from the new book, "How to Do Space Age... Read More

Tax Trap #5 -- Ignoring The IRS (and the 5 best ways to contact them!)

We all love to criticize the IRS, don't we? And... Read More

What You Need To Know About Taxes If You?re Getting Married

It may not be high on the list of wedding... Read More

Complaince of Tax Return in Electronic Commerce Taxation

Emerging Legal issues of Tax compliance of e-business Self-assessment system... Read More

How To Claim CHILD TAX CREDIT The Right Way And Add An Extra $2,000 To Your Refund

The U.S. Department of Agriculture estimates that it costs nearly... Read More

Your IRS Tax Appeal Rights

Are you in the middle of a disagreement with the... Read More

Home Business Tax Tips

If you have recently started an Internet or home business,... Read More

Some Folks Pay A Lot Less Tax Than Others On Very Same Income?Did You Pay Too Much Tax In 2004?

Someone once remarked, "Next to being shot at and missed,... Read More

SFR Substitute for Returns: IRS Action on Non-Filers

In the latest Star Wars episode, the evil empire executes... Read More

Euro Tax Haven Threat

Media reporting of a new EU savings tax directive has... Read More