Increase your paycheck

increase your paycheckIf you are a homeowner, your tax savings is usually realized when you file your federal income tax return once a year after you have already spent money on interest and property taxes. You may look forward to the refund as a windfall from a forced savings account. However, some people would rather get their savings all during the year instead.

It is possible to make adjustments to your tax withholdings so that you get a little extra in your paycheck throughout the year. You can talk with your employer about modifying your deductions as stated on your W-4 form.

But be careful, by increasing your exemption or deduction from say 0 to 1 or 2 and/or from single to married, you will receive more money in your paycheck but if you over-estimate your exemptions and underpay your taxes you may incur interest or even penalties when you have to file your taxes by April 15th.

If you are considering using this strategy, seek some professional tax advice or talk it over with your HR department at work. Additional information is also available on the IRS website under Completing Form w-4 and Worksheets.

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