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How Your Increased Paycheck May Affect Your Tax Deductions

By now, you may have noticed a slight increase in your paycheck! This is a great opportunity to ensure that you won’t have a tax liability in 2019. With the many changes that we will be seeing during the 2019 tax filing period, I implore you to check your deductions. Here is a short list of things you can do:

Review your W-4:
If you have been on a job for some time or newly started, request a copy of your W-4 to view exactly what is on the form. Remember your W-4 should work in concert with your current salary, your tax bracket, and if you are married, your spouse’s salary also.

Talk to your accountant:
Your accountant or tax professional will be able to alert you and your spouse (if married) to the number of exemptions that should show up on your Form W-4. It is important to seek the advice of a professional and put all the cards on the table. This is the only way to obtain accurate advice and to limit your chances of having a tax liability from not having enough taxes taken out at work.

Be careful of who you speak with:
There has been some strange advice that I have heard over the years about withholding taxes at work. I have even heard of claiming nine exemptions so that little-to-no taxes will be withheld from your check. Bad advice. I have also heard that the best thing to do is just claim single with zero exemptions and get a small pile of money when you file your return. Possibly bad advice.

I will say this—everyone’s situation is unique so the advice that may have worked for someone may not work for you because there may be a different set of circumstances that aren’t seen by either party. Speak with a professional about things of this matter. Speak to your co-workers and neighbors about things less important than this.

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About Frederick Towles

Frederick Towles is an entrepreneur, author and professional coach on personal finance, recognizing, seizing and leveraging opportunities of all kinds. Frederick founded The Towles Group Inc. to address issues that relate to small businesses and individuals – accounting, taxation, asset protection, financial compliance, wealth creation, debt management and business management. He also founded Unlimited Expectations Inc. which provides tools for individuals to assist them in the areas of opportunity recognition, leadership and personal finance. Through the tools and services offered by these companies people are positioned to operate their lives and their businesses at optimal capacity.

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