Federal taxes withholding
I am currently withholding an extra $300 in federal taxes to cover for my wife’s waitressing job that withholds little federal tax. How can I calculate if raising my pre-tax investments would be a better option. I am not sure how much would knock down our income enough without causing financial distress.
Terry Says
You’re talking about a very small amount of money — and there is no guarantee of returns on pre-tax investments. Discuss this with your tax preparer, but my advice is to make sure you cover all the necessary withholding, because penalties are expensive!
