Zen Penny

Seeking the Path to Financial Nirvana

Find The Sweet Spot, Adjust Your Withholdings

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How do you feel about tax refunds? Some say it serves as a great forced savings plan that can give us a nice lump sum in the middle of year. Other decry it as an interest free loan to the treasury. Either way your slice it, it is important to review your payroll withholdings so that you achieve the desired results when tax time rolls around. This is especially true when we have major life changes, such as changing jobs, getting married, buying a home or having children.

The IRS provides this handy calculator that will help you determine the right amount of withholdings to reach your goals at tax time. Be sure to have your last paystub within reach as you’ll need to enter how much tax has been withheld year to date.

Remember, you can adjust your W-4 as many times as you like, so your withholdings can change along with your goals.

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Written by Zenpenny

April 13, 2007 at 10:13 am

Posted in 2007, taxes

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