Hello People – Important Consideration – Did you Receive a raise or are you expecting one?

Here are some important reminders as you think about compensation, tax planning, savings and retirement planning.

The amount of tax withheld from your paycheck should increase automatically along with your higher income. But if you’re working two jobs, have significant outside income (from investments or self-employment), or you and your spouse file a joint tax return, the raise could push you into a higher tax bracket that may not be accounted for in the Form W-4 on file with your employer. Even if you aren’t getting a raise, ensuring that your withholding lines up closely with your anticipated tax liability is smart tax planning. Use the IRS Withholding Calculator; then, if necessary, tell your employer you’d like to adjust your W-4. We can help you navigate through this process if you prefer guidance.

Another thing to consider is using some of the additional income from your raise to increase your contribution to a 401(k) or similar qualified retirement plan. That way, you’re reducing your taxable income and saving more for retirement at the same time. Please contact us at peterc@coreperformance.net to review or discuss and we will get back to you promptly. Here’s hoping you have an awesome summer.

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