Have you seen a change in your paycheck this year? Thanks to an inflation adjustment by the federal government, millions of Americans started seeing more in their paychecks starting in January 2023.
“It certainly won’t be a game changer on its own, but every little bit helps,” said Amy Minjares, owner of Payroll Vault Redlands, a leading payroll and workforce management franchise.
The new standard deductions, which reduce the amount of income on which you’re taxed, will go up $1,800 for married couples filing jointly to $27,700. For single taxpayers and married individuals filing separately, the standard deduction will rise $900 to $13,850. Finally, for heads of households, the standard deduction will jump up $1,400 for tax year 2023 to $20,800. To learn more about the new inflation adjustment visit the IRS website.
There are also other things people can do to tweak their paychecks to increase their take home pay.
“With so many people watching helplessly as the economy eats away at their income, we created an easy "Paycheck Checkup,” said Minjares “These are four smart and simple steps everyone can use to find hidden funds.”
Payroll Vault’s Paycheck Checkup: Four Simple Steps
#1 - Do the Math – First, make sure you're actually getting paid what you're supposed to! According to the IRS, 33% of employers make payroll errors. Divide your annual salary by the number of paychecks per year to make sure it equals the gross salary agreed upon by you and your employer.
#2 - Tweak Your Taxes – If you have too much tax withheld during the year, your take-home pay will be lower than it could be. Reducing your tax withholding will immediately boost your paycheck. It's like giving yourself a raise! This is something you should review yearly.
- More than 4 in 10 American taxpayers don’t know when they last updated their withholding, according to data from the American Institute of CPAs.
- The U.S. Treasury reports about three-quarters of taxpayers over-withhold taxes in their paychecks.
Consider this: If you receive an annual refund of $5,000 from the IRS, that’s over $400 a month you could have back in your paycheck now by adjusting the withholding.
#3 - Brush Up on Your Benefits – Only 49% percent of people understand their employee benefits, which means lots of them (maybe even you) are paying for things they don’t need.
#4 - Early Wage Access - 72% of U.S. employees want access to their wages before their payday, according to the Workforce Institute. Earned wage access allows an employee to access a portion of their paycheck in advance of their regularly scheduled payday. Check with your employer to see if they offer this option.
Lots of people need extra cash just to make ends meet - or to buy a dozen eggs! Our local payroll experts at Payroll Vault can help companies and their employees pump up their paychecks.