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Time to give yourself a big raise

Good news. If you ask for a raise this week, you are almost guaranteed to get it. And you don't even have to venture in for that scary talk with your boss. Nope, you're gonna go right over her head, straight to the top. You're going directly to Uncle Sam.

By adjusting the amount of tax that is withheld from your paycheck, you can receive more of your money each pay period rather than waiting until the end of the year for a lump sum.

One of my best friends, a certified public accountant, says financial types scratch their heads each year over the phenomenon of tax-refund fever.

They are astonished each April, as they crunch numbers and file documents, that anyone would want to deduct hard-earned money from their paychecks each week just to loan it to the government.

Meanwhile, between increased food and fuel costs, those same folks are struggling just to pay the bills. It would seem the average family of four living on $35,000 a year could use that extra $100 a week.

Even more baffling, she says, is how excited people are to get their own money back at the end of the year- without any kind of financial gain.

"It's an interest-free loan to the government!" she says, smacking her forehead in exasperation. Apparently, this is what accountants talk about at parties.

Here's how to make the change, according to Scott Jordan, a certified public accountant and partner at accounting firm Gaines Kriner Elliott LLP in Amherst:

Step 1: Assess your situation. Did you receive a tax refund last year? If so, you're probably a good candidate to give yourself a raise.

Step 2: Go to and click on "Form W-4" on the upper left-hand side of the screen. Print two copies. You will submit one and keep another for your records. You can input text on the screen before printing or fill it out by hand in ink. Do the same with form IT-2104 for your state withholding at . Step 3: Fill out the worksheets to find the appropriate number of exemptions you should claim. Follow the step-by-step instructions to complete the form or consult a tax adviser.

Step 4: Deliver the form to your human resources department or payroll representative and watch the cash start rolling in.

>Things to be aware of:

* Be sure to follow the directions carefully on the W-4 form to avoid having too little withheld from your paycheck. There's no sense getting more money each week if you'll have to pay it back later.

* Have you gotten married, divorced or have you had children? Has your income changed significantly since last year? Any of these events can change the amount of the refund you would be entitled to this year.

* Think you'll miss getting that chunk of money back at tax time?

Have the additional cash you'll receive automatically deducted from your paycheck and deposited into your savings account. Let it sit, drawing interest and come back in April to find an even larger sum than you would have received in a refund check.


Share your money saving tips on the money smart blog at can also e-mail or call the MoneySmart consumer hotline at 849-4618.

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