Some folks are delighted when they get a big tax refund. They forget that it’s really their own money that they have lent to the government, interest-free, over the year.

If you’ve been getting refunds, maybe it’s time to adjust your W-4 withholding form. Claiming more allowances will put more money in your paycheck during the year, instead of your getting that fake “bonus” next year. Conversely, if you had to pay a lot of money with your tax return, maybe you were UNDERwithheld last year. It may be time to adjust your W-4 the other way.

Another reason to adjust is if you will be subject to the new 0.9-percent Medicare surtax on earned income. This kicks in at $200,000 for individuals, $250,000 for couples. Though employers must withhold the tax when an worker’s earnings top $200,000, a couple may be underwithheld if each makes less than $200,000, but together the figure tops $250,000.

For nearly 30 years, Mike Nickerson has owned and managed a small, full-service accounting practice in the Midcoast. He holds a bachelor's degree in accounting from University of Southern Main and a master's degree in financial planning from Bentley University.

He is a past board member and president of the Maine Society of Certified Public Accountants and currently serves on the Maine Board of Accountancy.

An aged rock musician, Nickerson now finds musical enjoyment playing upright and electric bass in a variety of bands spanning folk to jazz music genres. He and his wife have three grown children, and they enjoy their free time hiking, kayaking, golfing, bicycling and motorcycling.

http://www.nickersonpa.com/