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Adjust your Withholdings
Profit Ability Article Highlight

It's a good idea for anyone who has received a tax refund of $500 or more to adjust their income tax withholdings. There isn't any reason to give the government an interest-free loan by paying your taxes early. For most individual taxpayers, the number of exemptions claimed on the W-4 is the factor causing the excessive refund. The W-4 is the form your employer keeps on file that determines the amount of tax withheld from each paycheck. The more exemptions you claim, the less tax is withheld from each paycheck.

The problem is that most employees fill out this form when they begin a new job but never think to revisit the issue as time passes and circumstances change. You can change the number of exemptions on your W-4 any time. You should consider adjusting the number of exemptions on your W-4 any time a life change occurs that will either lower your income or raise your deductions. Perhaps you married or had a child. Maybe all you did was refinance your home or take out a home equity loan. In any of these instances, it is wise to review your exemptions.

Please feel free to call our offices at 714.937.6337 or e-mail us at info@talleynco.com for assistance with adjusting your exemptions.

ARTICLE TAKEN FROM AUGUST 2004 ISSUE OF PROFIT ABILITY ( VIEW NEWSLETTER | SUBSCRIBE )