With the holiday season on the way – and already in full swing in most retail stores – chances are you’ve been trying to think of a way to get a bit more cash on hand. Here’s an easy way to increase your take-home pay as soon as next week, or put those extra dollars towards a bigger refund next spring.
If your financial situation is similar to what it was last year – if you’re still working the same job and did not get married or have a baby, for example – you can file a revised Form W-4 with your employer before the end of the year to change the amount of your withholding. You can claim fewer allowances, or request your employer withhold a flat amount from your paycheck, to ensure you cover your tax obligation; or you can claim as many allowances as legally able and use the additional money in your paycheck for whatever you need.
Form W-4 is basically a checklist of reasons why you need more money in your paycheck. Dependents, spouses, and child care costs all require more immediately available money – but claiming too many allowances may result in a tax penalty next year.
For most people, the number one reason to adjust your allowances on Form W-4 right now is to pamper your family during the holidays. Whether it’s good food, gifts, entertainment and outings, or just being the sharpest-dressed folks at holiday gatherings, there’s always a reason for needing or wanting more money during this time of year.
For those who are perhaps a bit more financially responsible, accumulating funds in anticipation of high heating bills or possible home repairs could save you from an emergency situation.
And for those who have already taken care of holiday wishes and practical concerns for the winter season, filing a revised Form W4 with your employer might help the holiday cheer last through tax season.
Visit irs.gov today. You’ll find the link to the 2010 Form W-4 at the top of the left-hand sidebar.
Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.
There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.