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Finance For Dummies

Finance For Dummies offers personal finance information on investing, retirement investing, finance, insurance, credit cards, loans and more. Personal finance education is our goal.

Wednesday, April 26, 2006

Taxes

I am not an accountant, but I know a few things that can be helpful.

Do not think of tax time as when you should be getting money back from the government. The one thing most people will look forward to during tax season if their big return they will be getting. If you are getting money back from the government that is the equivalent of you paying more taxes than you should. This is true because you allowed the government to withhold too much money from your paycheck. The government then got to keep that money for an extended period of time without paying you interest on it.

So . . .

> If you received a lot of money back this year check with your Human Resource person to change your withholding number
> The lower the number your fill out on your W-4 form the more money the government will withhold from you paycheck
> The higher the number on your W-4 the more money you get in your paycheck. Make sure to remember you might owe
money come April 15
> If you know you will get money back do your taxes ASAP so you get your check ASAP
> If you know you have to pay you should wait as long as possible to pay (April 15 unless it is on the weekend or you get
an extension)


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