are available to many American workers to help them save taxdollars based on the cost of their daily coramute. You don’t have to pay Federal and FICA taxes on commuting-related parking or transit expenses if you have rooney deducted from your paycheck before taxes are calculated. 8, Saving—the best intentien. Although we intend to, many Americans save less than five percent of their annual income. There are ways to manage (NAPSA)—More than 40 per- cent of America’s workers still manage their expenses hy living from paycheck to paycheck, according to a survey sponsored by Automatic Data Processing, Inc. (ADP), the world’s leading provider of integrated payroll, human resource and benefits administration services. Tn partnership with the American Payroll Asseciation (APA), ADP has formulated the following tips designed to help American workers maximize additional imcorme throughstrategic management of their paychecks, withholdings and deductions: 1. Taxes: Knowledgeis power. Pay attention to new tax laws. They are like a moving target—changing yearly. Although recent tax changes are supposed to put more money im the pockets ofAmerican taxpayers and add an estimated $55 billion to Americans’ disposable income this year, most of the tax cuts are not “phased in” until 2004 to 2006. If you don’t have enough taxes withheld, you may be in for an unpleasant shock at tax time. On the other hand, if you received a large refund last year, you may have had too much money withheld at work, in effect giving Unele Sam an interest-free loan at your expense. To see examples of the effects of withholding adjustments, visit www.npw.adp.com. 2. A 40105) now can mean a “pot of gold” later in life. Many workers do not take full advantage of, or effectively manage, the benefits offered by their employer. For raore than 20 years, Section 401(k) of the Internal Revenue Code has authorized ernployers to create tax-deferred savings plans for their employees to help supplement Social Security. However, it’s your responsibility to pay attention te how your funds are distributed. To calculate your retirement dollars now to see where youll be at 65, visit wwwoopw.adp.cor. 3. Are you giving up free money? Some employers match contributions. Some employees who take part in 401(k) plans do not use it to their maximum advantage. Does your company contribute a percentage match to your 401(k) contributions? If it does, and you are not contributing With a little planning, you can get more out of your paycheck. the maximum amount that your employer matches, you are giving up “free money.” 4, Don’t just take the standard deduction. If your employer hosts annual fund drives and charitable events that allow pavroll deductions to make a difference for favorite causes and charities, you might be able to improve your bottom line. When your charitable contributions are deducteddirectly from your paycheck, you can easily prove to the IRS that youdo, in fact, donate more than the stan- dard deduction allowed. 5. Manage medical costs with advance planning. Taking part in your ermployer-sponsored health plan and utilizing a Health Care Flexible Spending Account could help you gave tax dollars. Some employersponsored insurance plans allow your medical and/or dental insurancepre- miums to be deducted from your paycheck before taxes are taken out. In addition, such an account allows you to sei up other accounts that help yousave tax dollars on your planned out-of-pocket medical/dental care costs. Check with your benefits administrator to determine if these options are available. 6 Dependent care casts could lower your tax bill. Some employers offer Dependent Care Flexible Spending Accounts to help defray the cost of workrelated dependent care, inchiding child or day care. If your dependent care costs are deducted from your pre-tax paycheck, you could save in more ways than one. G,. The cost of your commute might save you money with TRIP, Transportation Reimbursement Incentive Prograras (TRIP) your paycheck deductions and to continue saving for a rainy day through direct deposit. By setting up separate allotments to both your checking and savings accounts, you are more likely to live within your budget while still ensuring that a portion of your paycheck is safely held in savings. . START NOW! It’s not too late. Don’t be left without your pat of gold when you need it most. Game shows and lotteries are not the answer for most people. Life passes quickly and before you know it, you might need extra money for the unexpected and the long term. The point is: take time now to understand and manage your paycheck. It takes some knowledge and a little hard work, but will be worth it in the end when you achieve your future goals. 10. The APA can show you the money! As the nation’s leader in payroll education and training, the APA is dedicated to prornoting understanding of payroll. Workers interested in improving their understanding of their paychecks, withholdings, deductions and related options can visit www. nationalpayrollweek.com for helpful information, includinga free streaming video version of APA’s popular guidebook, Your Paycheck. ADP and APA work together to help America’s employees better anderstandtheir paychecks in order to take advantage ofpossible tax savings and reduce controllable costs. Making small but wellplanned adjustments now can help yousucceed in the future. To learn more about your paycheck and how to better manage it, log onto: www.nationalpayroll week.com.
