As a Federal Employee, how will the passing of the Tax Cuts and Job Act impact you?
This is a great time of year in which most FERS employees are thinking about Federal Income Taxes. However, what I find is that most people are busy thinking about LAST years taxes instead of taking a few moments, and addressing what they can do to prepare for their Federal Income Taxes, this year.
That is right, your 2018 federal income taxes.
With the passing of the Tax Cuts and Job Act in December of 2017, most individuals have an opportunity to save on their federal income taxes. You may have already experienced this with an increase in your paycheck recently.
One idea that you could consider is using the 50/50 strategy. One area that we work with clients on is applying the 50/50 strategy any time that they receive a pay raise.
50% of any increase in income, in most cases, should go to increase your lifestyle. Enjoy the extra income!
The remaining 50%, find ways to increase your savings and path towards financial freedom. As a FERS Employee if you are not maximizing your 401(k) Plan by contributing $18,500 each year (or, $24,500 if you are age 50+) this is a dynamic way to inch you closer to that goal.
Review Your W-4 Withholdings
This is a great time to review your W-4 withholdings to see if it makes sense to change them.
If you are anticipating tax savings in 2018, can you contribute more to your Thrift Savings Plans (TSP) or other investment accounts?
Questions?
100% of the questions that we address in FERS Federal Fact Check come from Federal Employees.
If you have a question, let us know!
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