The Income Tax Deduction Mistake

One of the most common financial mistakes that people make is the amount of the deductions that are taken from their income. I know a fair number of people that use the tax return as a “savings account.” This “savings account” is usually spent before it’s received. Some of the amounts I’ve seen could fund a Roth IRA for the year. In some cases, for the whole family.

I would rather have those funds in my account, earning returns for me, not the government.

When my income was reported by way of the W-4, it was my objective to get within $200 of “breaking even” on my tax return. In order to restore control of these funds, fill out the W-4 honestly and submit the new one to your employer. This process may take two to three years to wash out, so be patient and if adjustments need to be made, do so.

Could you use an extra $20 a week? How about $100?

[tags]finance, taxes, deductions, investing[/tags]