THE WANDERING TAX PRO
Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 50-year veteran tax professional Robert D Flach.
Wednesday, May 17, 2017
As it is college
graduation time I thought I would reprint some advice to recent graduates that
I had given in a post from a couple of years back.
Dear Graduate -
1.Claim Single-1, or Single-0, on your Form W-4
for federal and state withholding.Do
NOT claim more than 1 exemption.
2.Participate in your employer’s 401(k) or
403(b) plan.If cash-flow permits,
contribute the maximum, which for 2014 is $17,500.If you cannot contribute the maximum try to
contribute at least enough to qualify for the maximum amount of any employer
matching contribution.If your employer
offers a ROTH 401(k) or 403(b) option choose this option.As an alternative, if you are contributing
the maximum put 50% in a “traditional” account and 50% in a ROTH account.
3.If you contribute toward the cost of
employer-paid group health insurance premiums via payroll deduction, and you
are offered an option, elect to have your contributions be treated as
4.Participate in your employer’s medical
expense Flexible Spending Account (FSA).Be conservative and start with $1,000.You can increase your contribution in subsequent years once you get a
handle on your annual out-of-pocket medical expenses.
5.If you have any cash from graduation gifts
left over open a ROTH IRA account and use this money to fund your 2014
contribution.The maximum you can
contribute to an IRA, “traditional” and ROTH combined, for 2014 is $5,500.
6.Take an empty coffee can, or other form of
“piggy bank”, and put it in your bedroom.Each week put $10, $20, or $50 in this “bank” (if you choose $20, but
$20 in each week).On January 2nd of
2015 take the money that has accumulated in this “bank” and contribute it to
your ROTH IRA for tax year 2015.Continue this practice for 2015 and subsequent years.
And if you are
thinking about becoming a tax preparer I offer my advice in my new book SO YOU
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PREPARER MEMBERSHIP ORGANIZATIONS
RESPONSIBILITY – ETHICAL PRACTICES
A BLOG TO PROMOTE YOUR TAX PRACTICE
YOUR TAX PRACTICE
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To order your copy of
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