Top Five 'Must-Do' Tax Tips
SAN ANTONIO, Jan. 11 /PRNewswire/ -- In January, taxpayers receive the most important tax form of the year - Form W-2, Wage and Tax Statement. Your 2009 income tax and future social security and Medicare benefits are based on it, so its accuracy is vital to short- and long-term financial health.
The American Payroll Association, the nation's leader in payroll education, offers W-2 tips to save time, money, and headaches this tax season:
1. Increase your pay for 2010. If you get a big tax refund, you overpaid your taxes. The average person overpays taxes by more than $200 a month, according to the IRS! Making just minor adjustments to your W-4 form can increase your paycheck. The W-4 assistant at www.nationalpayrollweek.com/W4 can help determine the withholding allowances to claim on Form W-4.
2. Does the government owe you 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. Is your W-2 correct? Check it against your final 2009 paystub. If your W-2 seems incorrect, contact your payroll department.
Things to watch include: * Box 1 should differ from your final 2009 paystub year- to-date gross pay if you participate in a 401(k) or other employer-sponsored savings plan. * Box 3 total should not exceed $106,800 - the 2009 social security wage base. * Boxes 1, 3, and 5 should be less than your final 2009 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 flexible spending accounts.
4. Does your Social Security Number (SSN) match 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. Did you receive everything you need to file an accurate tax return? You should receive a W-2 from every company that paid you in 2009. Contact the payroll department of any company you worked for in 2009 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 W-2.
For additional tips, visit www.nationalpayrollweek.com.
SOURCE American Payroll Association