Feeling UnderPaid and OverTaxed?
Feeling UnderPaid And OverTaxed?
According to the IRS, 80 percent of all employees; over 100 million people, have too much money withheld from their paychecks for federal taxes. This happens when people start new jobs, because they are asked to complete the tax withholdings form (IRS Form W4) without assistance and poor instructions.
When employees fill it out incorrectly, they have too much money withheld for taxes, causing them to lose money because they are not able to use that money throughout the year to invest in their retirement accounts, to rapidly eliminate debt saving on interest payments, or for lifestyle instead of using credit cards. Parents are especially hurt financially when this happens!
Our money has value, which is why banks, investment companies, and big business to include retailers advertise, market, and hire sales people to get it from us! They then use our money to make money. We must learn to use some of our own money to make more money if we desire financial success.
Even the IRS suggests that people would be better off, if they maximize their take home pay and use some of it for Investing or Debt Elimination.
We use a strategy known as Income Shifting to help people maximize their take home pay. We help them properly complete both the Personal Allowances Worksheet and the Deductions, Adjustments, and Additional Income Worksheet, which are 2 of the worksheets used to properly calculate allowances on the IRS Form W4. If we were educated on how these forms affect our money both short-term and long-term when we were 16 years old getting our 1st job in fast food or a movie theater, like myself, we would get it right throughout our entire working careers. However, that is not now, nor has it been the case. Here’s just an example of how not filling these worksheets out correctly can affect one’s ability to retire. Let’s say a person received a $5000 tax refund every year for 20 years, which is easily what many parents receive. Now we know that the majority of American do not invest their tax refund, or pay off debt with it; they typically spend it. So over a 20 year period of time, $5000 per year, they would have been refunded and spent $100,000 that they overpaid in taxes. Furthermore, that’s $100,000 that made them no money in or out of their retirement accounts. Income Shifting allows them to shift these valuable tax dollars back into their paychecks increasing their Cashflow! This typically results in a $200 - $500/monthly increase in their take home pay.
Note: Many of the states that have a state income taxes utilize the number allowances annotated on the IRS Form W4 to determine state tax withholdings. Therefore, properly adjusting the W4 typically results in less state income taxes being withheld from ones pay as well!
Finally, as long as these forms are completed per the IRS instructions, no money will be owed to the IRS at the end of the year!
If you want to find out more about Income Shifting and the ways that we educate and empower people to improve their Personal Finances, feel free to call me directly at 786-532-4645 or email me at email@example.com
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