Update your paycheck deductions to maximize your money

Forego a tax refund to get more money now
Published: Jul. 6, 2022 at 1:13 PM CDT
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InvestigateTV - Paycheck deductions dictate how much of your money goes straight to you and how much is set aside for taxes, retirement, insurance, and other expenses. Planning your deductions could put more money from each paycheck into your wallet, while also ensuring you do not owe taxes when you file.

Michael Joyce with the financial firm Agili said you want to make sure you’re not deducting too much from your paycheck.

”It may be a nice idea to get a big tax refund at the end of the year,” Agili said. “But really, you’ve been foregoing money in your paycheck that you could have been receiving before you got this tax refund.”

Joyce said you want to make sure you have more dollars in your pocket today, rather than more dollars in your pocket six months from now.

On the flip side, he said you also want to make sure you’re not withholding too little from your paycheck. 

“You don’t want to be setting yourself up for a big tax surprise where not only do you have to pay more in taxes, but you could have a penalty for under withholding,” Joyce said.

Finally, he said if you’ve had any major life changes like a marriage, a baby, or a divorce, it’s important to think about those changes will impact your deductions.