Payroll Deduction Calculator

PaycheckCity.com has a handy calculator to help you determine the amount of federal and state withholding and the net amount of pay you will receive. If you are overpaying withholding taxes and getting back a big refund this is a good tool to help you find the right level of dependants to claim. If you owe the IRS this year you can use this calculator to make sure you have enough withheld.

Charitable Donations From Your IRA

If you are over 70 1/2 you know that each year you are required to take money from your IRA whether you need it or not. Good news for those in this group who make charitable contributions - the IRS will allow distributions again in 2007 to be made directly to qualified charities without including the contribution amount in your Adjusted Gross Income.

This could allow more of your itemized deductions that are tied to you AGI to count, like Miscellaneous Expenses (must exceed 2% of AGI) and Medical Expenses (must exceed 7.5% of AGI) or could reduce the taxable amount of your social security benefits.

Bottom line if you must take a required minimum distribution from an IRA and you plan to donate to charity you are probably better off having the donation paid directly from your IRA. As always check with you tax advisor first.

photo courtesy of cohdra@morguefile.com