First, one of the Grasshoppers turned 41 on Feb.7. Happy Birthday! I know it was a festive occasion. The cake was delicious.
Second, I need to clean up some errors and misconceptions about my last writing on "Paychecks!". I mis-spelled Porsche. I can't believe that I could make such a mistake. I left out the "c". If you are going to have snob appeal, you want to spell Porsche correctly. I also indicated that if you made $1000 per week, the medicare health insurance deduction was 1.65% of the total. Well it is really 1.45%. So instead of a deduction of $16.50 it is only $14.50. A gain of $2.00. I want to be correct. I apparently created some feelings of quiet desperation when I said that the federal tax deduction would be 20% or $200. Because the marginal federal tax bracket up to $58,000 is only 15% and you get to take deductions for those kiddies and mortgages and state tax payments, the deduction from you $1,000 per week would only be around $100 per payday. So Grasshopper No. 5, out of $1,000 you would take home a net of $683.50 instead of the meager $581.50. That should make you feel better.
Now a quick note on taxes. I know most of you do your own federal and state taxes. Most steps are pretty simple. After you calculate the total federal tax for the year, USE THAT NUMBER TO DETERMINE YOUR 2005 DEDUCTION ON YOUR PAYCHECK. For example, if your federal tax obligation this year was $3,000 divide that by 52 weeks and that should be your deduction on your paycheck. That comes to $58.00 per week for those of you with a calculator. Do the same with your state deduction.
I know it feels good to get a large tax refund at the end of the year. From a pure money management standpoint, if you are having too much deducted off each paycheck, you are letting the government use your money for free. That is not good management. I always errored on the side of a SLIGHT REFUND but I would cut it pretty close. I wanted more money in my pocket during the year and I didn't plan on a big refund.
Another key to getting rich, YOU MANAGE YOUR MONEY, DON'T LET THE GOVENMENT DO IT. Dah!
Love,
Dad (Just Chas.)
Now normally with deductions they have you sit down and claim a 1, 2, 3, 4 and so on. Can you ask your employer to take X number of dollars out per week verses the other way?