The Fastest Pay Raise
The fastest way for anybody to give themselves an instant pay raise with no even requiring the authority of your boss is to take a look at your taxes and just make a few smart moves. The pay raise could be more cash in your keep next April with bigger refunds from Uncle Sam or it could even mean some cash suitable away.
You are probably aware of the fact that funds you contribute towards your employer-based retirement plan is excluded from your income which means that the more you contribute the lower the taxes you will pay. Take a look at your current contributions and chances are that there will be plenty of room for you to increase your contributions without having reaching your maximum. The roof here is $22,000 if you are 50 years older and $16,500 for others.
An extra Caution here is to take full advantage of this pay raise option this year to if you have been following the news then you know that there are all kinds of proposals in the pipeline that will dramatically cut down on this figure if they are passed into law. With the current economic disaster and federal deficits hanging shortly over our heads anything could happen about next year.
Secondly when you receive tax refunds every year, it is typically trigger for joy but the reality is that you gave out an interest free loan to Uncle Sam. What would you prefer, cash appropriate away when you have earned it or enabling somebody to hold on to it until next year? All you need to do to quickly solve this trouble is to file a revised Form W-4 with your company. The formula here is quite basic; the more allowances you claim on your W-4 the less tax the government will withhold. Here is a useful tip to avoid penalties of any kind from the IRS for underpayment. What you need to do is prepay 90 per cent of this year’s tax bill. Another strategy is to prepay 100 per cent of last year’s tax. That is assuming that your adjusted gross revenue was less than $150,000. If it was higher you will have to prepay 110 per cent to avoid penalties. This is very important for shielding you against underpayment penalties and thus ensuring more dollars in your pocket. Take a close look at your taxable ventures like stocks. By selling dropping stocks you can use the losses to offset other investment gains and you will also be able to prevent up to $3000 of regular income from being taxed. Also did you have excess investment losses that you filed in your 2010 tax returns? If the answer is yes, then you can use them to reduce your 2011 taxes. Yet another way to earn yourself a much deserved raise is to write off the full value of your mortgage interest and other deductions.
You also need to be aware that the home energy tax credit advantage expires at the end of this year and so you need to take advantage of this extra cash for producing energy-efficient improvements in your principal residence.