| The holiday rush has come and gone and most of us | | | | having that additional money throughout the year |
| are settling back into our normal routines as the new | | | | affect your finances. In many cases the very people |
| year moves forward. Tax season is upon us and for | | | | looking forward to receiving a check from Uncle Sam |
| many individuals who look forward to a check from | | | | struggle throughout the year making ends meet or |
| Uncle Sam it can be a much anticipated time of year. | | | | living paycheck to paycheck. The average income tax |
| Are you one of the lucky individuals looking forward to | | | | refund is just over $2,000. There are few people who |
| a lump sum payment in the coming months? If so you | | | | wouldn't look forward to receiving that amount of |
| may want to read further to decide if getting an | | | | money but consider this: if you had the correct amount |
| income tax refund is really in your best interest | | | | of taxes withheld throughout the year, you would have |
| financially. | | | | roughly $200 more per month in your pocket. |
| Does everyone get a refund? | | | | How to determine the correct amount to withhold? |
| When tax season rolls around you will fall into one of | | | | You can visit the IRS website to locate a "withholding |
| three main categories. We have already mentioned | | | | calculator" which will help you determine the correct |
| the group that looks forward to receiving a refund. If | | | | way to fill out your W-4's before turning them into your |
| you are not a member of this group, then you will | | | | employer. You should also remember that you can |
| either owe the IRS or you will break even in which | | | | and should change your W-4 at any time throughout |
| case you will not have to pay additional taxes on your | | | | the year if you experience personal changes that |
| income and you will not receive any refund for taxes | | | | affect your finances. This can include marriage, |
| paid. | | | | divorce, the birth of a child, or the loss of a job. |
| How are refunds determined? | | | | Remember if you regularly qualify for an income tax |
| You don't have to be a CPA to understand the basic | | | | refund you are not receiving a windfall. While it may |
| premise driving income tax refunds. Throughout the | | | | feel like winning the lottery you are in fact simply |
| year you have taxes withheld from your earned | | | | receiving your own money that the government has |
| income. Ideally your withholding amount would match | | | | held throughout the year without benefit of any interest |
| your tax liability. If your withholding is too high, you will | | | | you may have earned if you had access to it yourself. |
| receive a tax refund; conversely if your withholding is | | | | If you take a moment to think about how you can |
| too low you will owe the IRS the difference. | | | | benefit from having your own money available each |
| Money now or later? | | | | month throughout the year versus getting it back in |
| You may be excited about receiving a big refund but | | | | one lump sum you might determine getting a refund |
| you should ask yourself this question: How would | | | | isn't the best use of your hard earned money. |