taxes

Tax breaks at your job

Taxes » Tax Credits » Tax breaks at your job

Getting your first job
Getting your first job © AVAVA - Fotolia.com

Getting your first job

Uncle Sam gets a portion of your paycheck via payroll taxes. You do, however, have a bit of a say in how much comes out of your pay by adjusting your withholding.

If you have too much withheld, you'll get a refund when you file. That's not necessarily bad, but wouldn't you rather have your own money year-round instead of giving the IRS an interest-free loan?

On the other hand, if you don't have enough taken out, you could face a major tax bill, and possible underwithholding penalties, at filing time. Ask your boss for a new Form W-4 so you can run the numbers and adjust your withholding.

Your job likely offers several tax breaks. If your employer provides health care coverage, your medical insurance is a tax-free benefit to you. You'll find out how much that's worth on your W-2 earnings statement.

A flexible spending account, or FSA, also might be part of your job benefits. Here you can save pretax dollars to pay for medical care not covered by insurance.

You also want to take advantage of your workplace's tax-deferred 401(k) retirement plan.

And if you move to take a job, even your first one, you can write off many of your relocation costs.

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