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What Are Pre-Tax Deductions?

Voluntary contributions or deductions from your pay can affect your net take home pay. These voluntary contributions can reduce your current tax rate and potentially increase your net take home pay. These contributions are included in your employer's cafeteria plan, and participation is optional. A cafeteria plan can be described as going into a high school cafeteria, and you get to select what you want to put on your tray. You may consume some of the items you choose, and other options declined. Let's review how pre-tax contributions are deducted from your gross pay. Photo by Kelly Sikkema on Unsplash Flexible Accounts You can use Flexible Accounts for daycare and medical expenses. A Flexible Spending Account (FSA) can be used for qualifying medical purchases throughout the year. With an FSA, you can pay for eyeglasses, dentures, over-the-counter medication, menstrual supplies, and more using an FSA card. You can use the Dependent Care Account (DCA) for qualified daycare expe

How Do Taxes Affect Your Paycheck?

Have you ever looked at your paycheck or end-of-year bonus and been surprised by the taxes that were deducted? Well, many others have been in the same situation. Taxes are a welcome to the workforce notification. Let's see the distinction between the money you earn and what you take home.  Gross Pay Your gross pay consists of the total amount of money you earned for a particular pay period before deducting any taxes. So, if you make $60,000  a year and receive your pay semi-monthly, your gross pay would be $2,500. Your gross income may show as salary or regular earnings on your pay stub. Your gross pay can differ if you are paid hourly and work fluctuating hours.  See: Where Did My Money Go?   Ad   Federal Income Tax Federal income tax is a mandatory deduction and will vary based on the completion of your W-4. The IRS has a tax withholding estimator that can guide you in estimating your withholding. If you withhold too little, you may end up paying back the government during tax t

Holiday Gift List That's Easy On Your Budget

The holidays are a time for cheer and gathering with your friends and loved ones. It's also a time for gift-giving with family, friends, and coworkers. Well, whether you're participating in a gift exchange, white elephant party, or just shopping for that special someone, here are a few gift ideas to keep your budget on track.  Photo by Amy Shamblen on Unsplash 1. Gift Cards Ad An Amazon gift card is the easiest option for the hard-to-shop person in your life. You can preset your spending limit and know that your purchases will not be regifted in the future. Gift cards can come from Amazon, a favorite retailer, and even restaurants. We all have to eat.  2. Electronics Ad The most popular electronics are the Playstation 5 or the Nintendo Switch. These items can cost between $400-$800 and up. You can keep your budget on track by purchasing an Amazon Fire Stick that can be used anywhere. If you have a friend or family member who loves to travel, this is the perfect gift. As long

How To Prepare To File Your Taxes At Year-End

The tax season is almost here. Prepare for tax season with advice that can help you eliminate April woes. You may even be able to file your taxes for free if you meet specific income-level requirements. Last year I volunteered to file taxes for free with the United Way's RealSense program under the IRS's Volunteer Income Tax Assistant program. Well, this year, I'm back at it! I will volunteer with AARP Tax-Aide to help seniors file their tax returns. To find out if you are eligible to file for free, visit the IRS's website and search for a VITA center near you . Before you go, here are a couple of tips to help you prepare to file your taxes. Gather Your Documents If you are not going to file your taxes on your own, it's essential to ensure that you have all the appropriate documents to file your taxes. Having all of your needed documents can reduce the number of trips you need to make and expedite receiving your refund if you are due one.  The most common documents

How Parents Can Teach Their Children To Budget - Today

As a parent, you can teach your child how to budget by having conversations about income, spending, and saving every day. Even the most minor thing can turn into a positive discussion about money habits. Having a family money conversation with your children at an early age can motivate them to learn more. You can accomplish this by starting with age-appropriate discussions to boost your child's financial literacy and yours too. Here are a couple of tips on how you can get the conversation started.  Budgeting For Groceries One of the most significant expenses is the grocery budget as a parent. Your family can save money by planning your meals as a family. You can accomplish this by inventorying your freezer and pantry items to determine what groceries you may need to purchase for the week or month.  Keep a few staples such as dry goods, beans, pasta, and canned vegetables stocked in your pantry. These are fillers in the meal and have a long shelf life. Keep a stock of proteins, froz