$25,000 Tax Shocker 😳: The Importance of Updating your W-4

Key Takeaways:

1. Check Your Paycheck Regularly: Every so often, take a look at your pay stubs to make sure the right amount of taxes and other stuff is being taken out.
2. Understand Your Withholdings: Learn how to figure out how much tax you should be paying. Compare your old tax bills to what's being taken out of your paycheck now.
3. Plan Ahead to Avoid Surprises: If you need to, change your W-4 form (that's the tax form you fill out at work). You might also need to make extra tax payments throughout the year so you don't get a big bill in April.
4. Get the Most Out of Your Benefits: Make sure you're contributing as much as you can to things like your 401(k) retirement plan. This can lower your taxes and help you save for the future.
5. Stay on Top of Your Money: Checking your finances regularly helps you avoid surprises and gives you more control over your money. It's like keeping your room clean – it might be a bit of a chore, but it feels good when it's done!

 

Chapters:

Timestamp Summary

0:00 Unexpected Tax Surprises from Unupdated Paycheck Stubs

0:28 Life’s Like a Box of Chocolates with Preparation

1:07 The Importance of Regularly Reviewing Your Paycheck

2:10 Managing Variable Income and Withholding Strategies

2:55 Understanding Tax Withholding and Avoiding Underpayment

3:53 Adjusting Tax Withholdings to Avoid Year-End Surprises

5:15 The Importance of Regularly Checking Payroll and Benefits

5:48 Making Financial Life Like a Box of Chocolates

 

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Phillip Washington, Jr. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.