Before I left the traditional workforce to become a business owner and entrepreneur, I always made sure to make the most of my paychecks. Thanks to a career stint in finance, I learned how to maximize my W-4 exemptions and keep more money that I earned, while learning how to maximize tax deductions on the back end. And while those seem to be the most common and effective ways to make the most of each paycheck, they aren't the only ones. There were five other methods I used to make the most out of (and keep) every dollar I earned.
Flex spending accounts.
I allotted $200 of pre-tax dollars to a flexible spending account. This helped me reduce costs for out-of-pocket on prescriptions, healthcare deductibles and even helped me with childcare costs when my children were much younger.
I had a 401(k) matched asset plan with my employer that I allotted $125 a paycheck (I was paid biweekly) toward, and my employer matched it. When I left the traditional workforce, I took the money out of my 401(k) and rolled it all into a Roth IRA, which gives me more flexibility, while still giving me tremendous returns.
Without tuition reimbursement plans, I never would have finished my college degree. At the time, my employer reimbursed 100 percent of my tuition and fees, so long as I got a grade above 80 percent in the class. Even though I had to attend night classes and flex semesters, this helped me get my degree, student loan free.
When I was a manager, I oversaw a $20,000 a month budget for my education center, in addition to my own expense reports, and I was very meticulous about my record keeping. One of the biggest mistakes I saw my peers make was charging things on their personal credit cards, but wait to file their expense reports. Trouble was, the longer they waited, the more interest they paid on everything they charged. Since interest can't be file on expense reports, I wasn't about to wait. I filed my expense reports every Friday, like clockwork.
Each tax year, I made a point of becoming acquainted with each and every professional expense that the IRS would allow me to deduct. I learned quickly that I was eligible to claim several un-reimbursed employee expenses such as travel expenses for work, and even some home office expenses. I would itemize these expenses on my 1040 Schedule A form, and made sure that they did not exceed 2 percent of my adjusted gross income -- an IRS rule. Of course, the rules change each year, and hiring someone to do my taxes paid off in time and money in the long haul. Today? I just keep my receipts and hand them over to my CPA.
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