PHOENIX, Aug. 9, 2001 (PRIMEZONE) -- While millions await the proverbial "check in the mail" tax refund, most hard-working taxpayers don't know they might have saved even more money in the first place if they had taken all the withholding taxes allowed by the IRS. "Now's a good time for people to take a look at their lives and see how they've changed over the past year in order to save taxes at the end of this year," said Diane Kennedy, CPA-Tax Strategist, and author of "Loopholes of the Rich: How the Rich Legally Make More Money and Pay Less Tax." Most consumers just aren't aware they can choose to pay less in taxes by making certain that their W-4 forms contain the updated W-4 for withholding filed with their employer, says Kennedy.
Some items that could signal a change to the amount of taxes withheld are:
(1) Change in marital status.
(2) Change in dependents. This could be due to the birth of a child or when a child grows up and leaves home. Either change means an adjustment to Form W-4.
(3) Buying or selling a home.
(4) Stock gains or losses.
(5) Change in "other" income such as interest or dividend income.
(6) Change in "pass through" income such as from partnership or S-Corporation ownership.
Kennedy offers one more tip: "If you always receive a refund, decrease your withholding by increasing your exemptions! If you receive a large refund, you have just given the IRS an interest free loan. Instead use the extra money you will get each month to invest. You should get the benefit of the money, not the IRS!"
Kennedy is the founder and owner of DKA, a leading tax strategy and accounting firm based in Phoenix, and is the co-owner of TaxCents(tm), a tax education company designed to encourage individuals to make informed tax-advantaged financial decisions. TaxCents(tm) provides do-it-yourself tools and education so all taxpayers can take advantage of the legal loopholes they are entitled to and decrease their taxes. At www.legaltaxloopholes.com, TaxCents offers books, 101 Legal Tax Loopholes audiotapes, seminars, and the latest in what's hot in tax loopholes.
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Sherri Klein, APR
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