According to the 2007 American Payroll Association (APA) national online survey, “GETTING PAID IN AMERICA,” more than two-thirds, or 67% of America’s workers would experience financial difficulties if their paychecks were delayed for just one week—indicating that workers are living paycheck to paycheck.
In partnership, the APA and ADP, Inc. combined resources and payroll expertise to provide America’s workers with information on how to maximize additional income through strategic management of their paychecks, withholdings, and deductions:
Taxes: Knowledge is power. Pay attention to new tax laws. They are like a moving target—changing yearly. Recent tax changes are supposed to put more money in the pockets of American taxpayers. However, if you don’t have enough taxes withheld, you may be in for an unpleasant shock at tax time. On the other hand, if you received a large refund last year, you may have had too much money withheld at work, in effect giving Uncle Sam an interest-free loan at your expense.
Be smart about your 401(k). Many workers do not take full advantage of, or effectively manage, the benefits offered by their employer. For more than 20 years, Section 401(k) of the Internal Revenue Code has authorized employers to create tax-deferred savings plans for their employees to help supplement Social Security. It’s your responsibility to pay attention to how your contributions are allocated to ensure your nest egg is appropriately diversified for your stage of life. Also, find out if your company gives a percentage match to your 401(k) contributions. If it does, and you are not contributing the maximum amount that your employer matches, you are giving up “free money.”
Manage medical costs with advance planning. Some employer-sponsored insurance plans allow your medical and/or dental insurance premiums to be deducted from your paycheck before taxes are taken out. These Health Care Flexible Spending Accounts also allow you to set up other...
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