exemptions are claimed on your form 1040 tax return. you are allowed one exemption for yourself, one...

THE PERSONAL FINANCIAL SUCCESS

COMPANY

• Exemptions are claimed on your Form 1040 Tax Return. You are allowed one exemption for yourself, one for your spouse, and one for each qualifying dependent

• Allowances are claimed on your Form W4. The purpose of Form W-4 is to assist your employer with estimating the appropriate amount to withhold from your paycheck

Exemptions vs Withholding Allowances

Exemptions vs Withholding Allowances

For Educational and Illustrative Purposes only

For Educational and Illustrative Purposes only

Pumping Up Your Take-Home Pay

This table shows APPROXIMATELY, how much a family earning $70,000/year, filing MFJ, with 3 children claiming

ZERO allowances on their Form W-4 will give to the GOVERNMENT…interest free

For Educational and Illustrative Purposes only

W4 with 0 allowances

= $694/month

=$8,328 Per Year

Minimize Taxes Strategy

• Correct Tax Withholding

• Business Tax Deductions

• Tax Record Keeping Software (audit proof your business)

Example based on a married couple filing jointly with three children

COUPLE # 1 COUPLE # 2 COUPLE # 3

Primary Job $70,000 Primary Job $70,000 Primary Job $70,000*1040 Deductions -$32,600 Part-Time Job $12,000 Part-Time Business $12,000

Total Income $82,000 Total Income $82,000 *Total 1040 Deductions -$32,600 *Total 1040 Deductions -$32,600

$49,400

Total Business Deductions -$25,000TAXABLE INCOME $37,400 TAXABLE INCOME $49,400 TAXABLE INCOME $24,400

*Total 1040 Deductions include a Standard Deduction of $12,600 + $20,000 ($4,000 x 5 exemption) $32,600. These numbers change annually.

ADDITIONAL DEDUCTIONS FROM HOME-BASED BUSINESS

Car/Truck $5,475 Wages $4,700 Business Gifts $25Communication $1,500 Medical Reimbursement $750 General Business Expenses $1,000

Meals $2,000 Travel $2,050 Auto Interest $500Entertainment $1,500 Depreciation $1,000 Tax Deductible Investments $4,500

Business Tax Deduction Advantage

W-2 Employees vs Home-Based Business Owners

For Educational and Illustrative Purposes only

Annual Mortgage $1,775($21,300) – (Interest ($14,000) / Taxes ($2,500) = $16,500 Tithes = $2,000

Business Income $12,000 Charity = $499 - Business Expenses $25,000 = $18,999 = ($13,000)

Pumping Up Your Take-Home Pay

This table shows APPROXIMATELY, how much a family earning $70,000/year, filing MFJ, with 3 children paychecks

will INCREASE with each extra allowance they claim on their Form W4.

For Educational and Illustrative Purposes only

Old W4 (0 allowances ) = $694New W4 (16 allowances) = $0

$50 x 16 allowance = $800/ Month

Pay Increase of $8,328 Per Year= $694

They will get their entire $694 back/month!

$500 per month x 12 = $6,000 Savings per year

Sample Paystub

RECRUIT AND GROW RICH!