We're halfway through the year, which means this is the perfect time to reassess how much you're withholding from your paycheck each month. Did you get a big tax refund last year? If so, shame on you! Wouldn't you have rather had that cash in YOUR pocket instead of giving Uncle Sam an interest-free loan?
Try pulling out last year's tax return to determine how much you paid in federal income taxes. Next, take a look at your last paycheck to see how much you've withheld through June. Double that number and you should have a fairly good estimate of what you're on track to withhold by the end of the year.
If your estimate is much larger than the total tax you paid during the previous year, you may want to claim more allowances on your W-4 to cut the withholding taken from your pay and hang onto more of your money now.
Not sure what to do with the extra cash? Instead of spending it, consider putting the money into a high-yield online savings account where it can earn even more for you over the second half of the year.
