2011 September-October

Page 139

Lighter cars—Depreciation is far less generous for cars weighing less than 6,000 pounds. Those costing PRUH WKDQ JHW Ă€UVW \HDU GHSUHFLDWLRQ RI IRU RU 7KDW PHDQV D FDU DQG D FDU ERWK JHW WKH deduction. New cars of any weight that cost more WKDQ JHW PRUH GHSUHFLDWLRQ deductions in years two through six than those costing less. Tax breaks for electric cars—All taxpayers are eligible for a dollar-­ IRU GROODU WD[ FUHGLW XS WR RQ "plug-­in electric motor vehicles" like the Chevy Volt.

Time For A Withholding Checkup 7KH : \RX KDYH RQ ÀOH GHWHUPLQHV how much money is withheld from your paycheck for income taxes. The

amount is determined by how many dependents you claim. The most obvious reason to make a QHZ : LV EHFDXVH \RX KDYH IHZHU RU more dependents, but there are other reasons. ‡ If you paid a big tax bill this year, you probably had income from other sources, but income tax is supposed to be on a pay-­ as-­you-­go basis. You could face underpayment penalties if don't report the extra income regularly. One way to avoid the penalty is to increase your withholding so an additional amount is deducted from each paycheck. You can also avoid penalties by paying estimated taxes every quarter, but it's easier to increase your withholding, according to experts at TurboTax. ‡ If you had a big tax refund, you have to ask yourself whether it would be better to decrease your withholding and invest in an interest-­paying account. You can arrange an automatic deposit made from your paycheck to a savings or

investment account. Or you could have it deducted from your bank account. When you have high-­interest credit card bills, paying on them would be a better use of the money. The average IHGHUDO LQFRPH WD[ UHIXQG IRU ZDV DOPRVW

MONEY

General Motors, Ford, Jeep, Mercedes Benz, Porsche, Honda, Nissan, Toyota and Volkswagen all have vehicles qualifying for this break, according to The Wall Street Journal.

‡ If you converted an individual retirement account to a Roth IRA in LQFUHDVLQJ ZLWKKROGLQJ ZLOO reduce the amount you have to pay ZKHQ \RX ÀOH \RXU WD[ UHWXUQ according to H&R Block. TurboTax and H&R Block tax software allows customers to determine how to adjust their withholding based RQ LQIRUPDWLRQ IURP WKHLU WD[ return. Or your accountant can help you determine the right amount. The IRS offers a withholding calculator at irs.gov. You'll need a pay stub and \RXU WD[ UHWXUQ WR XVH LW To increase withholding, increase your number of dependents or specify an additional amount to be withheld, VXFK DV RU

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SEPTEMBER-OCTOBER 2011 | VivaTysons

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