Get the Most out of Your Paycheck by Taking These Precautions
In tough economic times, most people need to squeeze every last penny out of their paycheck just to survive. There are three simple steps to take to ensure that you are getting all the money that you deserve from your paycheck. By following these couple guidelines, you could see a substantial increase in your take home earnings each pay period.
Make Sure Your Tax Deductions are Correct
With each paycheck there are deductions. Some, such as Medicare and Social Security taxes, will stay the same no matter what you are claiming. However, did you know that by changing your deductions you will receive more with each paycheck? You can claim a deduction for you, a non-working spouse, and dependent children you may have. The more deductions are claimed, the less that is taken out in both federal and state taxes. While it is illegal to claim more dependents than you actually have, be sure to claim what is rightfully yours. Changing the number of dependents on a paycheck is easy; ask your employer for a new W-4 to fill out. This could save a substantial amount of money per check.
Pay all Loans on Time
When a credit card or other loan is not paid on time, the lender can take your loan to court and be granted permission for a wage garnishment. This allows the lender to take money directly from your paycheck. The best way to stop wage garnishment is to pay all loans on time. This includes: credit cards, mortgages or rent, car loans, alimony/child support, utilities, student loans and virtually any other bill. If you are suffering economic hardship and cannot pay the bill, contact the lender. The majority of the time they are willing to work with you to avoid the hassle of court and wage garnishments. Communication is critical; failure to communicate as well as not paying the bill is a sure fire way to have the lender dip into your hard earned pay.
Sign Up for Tax Free Benefits
Sign up for benefits that are tax free. For example, any money taken out for health benefits is typically done before taxes. However, the most common is an employer sponsored 401(K) plan. This allows the worker to save a specific amount for retirement without paying taxes on it. To make the deal even better, many employers also match what you put into the account stretching your paycheck just a little farther.
Category: Family Finances
