Five Tax Tips to Put More Money in Your Pocket
SAN ANTONIO, Jan. 20, 2011 /PRNewswire/ -- Taxpayers receive the most important tax form of the year in January–Form W-2, Wage and Tax Statement. Your 2010 income tax and future social security benefits are based on it, so its accuracy is vital to your short- and long-term financial health.
The American Payroll Association, the nation's leader in payroll education, offers W-2 tips to save you time, money, and headaches this tax season:
1. Increase your paycheck in 2011. The average person overpays taxes by nearly $250 a month, according to the IRS. Making minor adjustments to Form W-4 can increase your paycheck. The W-4 assistant at www.nationalpayrollweek.com/W4 helps determine the withholding allowances you claim on Form W-4.
2. Don't forfeit free money. Read the back of W-2 copies B, C, and 2 to determine if you are eligible for credits. You could be missing out on thousands of dollars in tax credits.
3. Review your W-2 carefully against your final 2010 paystub. If your W-2 seems incorrect, contact your payroll department.
Important items to review: |
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A. Box 1 should differ from your final 2010 paystub year-to-date gross pay if you participate in a 401(k) or other employer-sponsored savings plan. |
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B. Box 3 total should not exceed $106,800 – the 2010 social security wage base. |
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C. Boxes 1, 3, and 5 should be less than your final 2010 paystub year-to-date gross pay, if you use pre-tax deductions to pay your insurance premiums or to contribute to medical or dependent care, parking, or transit flexible spending accounts. |
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4. Ensure your Social Security Number (SSN) matches your social security card. The name and SSN on your W-2 must match your social security card to receive your benefits. Ask the payroll department for a corrected W-2 if they do not match.
5. Make sure you get all your tax forms. You should receive a W-2 from every company that paid you in 2010 by January 31. Contact the payroll department of any company you worked for in 2010 that didn't send you a W-2. Request a 'reissued statement' to replace lost W-2s. If you earned more than $600 from a single company for any freelance or contract work, you should receive Form 1099-MISC, Miscellaneous Income, instead of a Form W-2.
For additional tips, visit www.nationalpayrollweek.com.
SOURCE American Payroll Association
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