FINANCIAL HOUSEKEEPING
Adjust your tax withholdings
Once you complete your tax return for 2005, it’s time to anticipate what you will need to pay Uncle Sam for 2006.
While many people overpay taxes and consider their refund to be a form of forced savings, they also need to recognize that this form of saving amounts to an interest-free loan to the government. A taxpayer could reduce his or her regular contributions and create a weekly or monthly set-aside from a checking account, funneling the additional money into an account that earns interest. Likewise, many people who owe a heavy slug of taxes every April can reduce the burden simply by adding to their ordinary withholdings.
To be more tax-efficient, alter the W-4 form filed with your employer, either increasing your allowances (to reduce your withholdings) or adding a regular additional payment.
SHORT COURSE
Stocks brake at support level
A popular technical-analysis term frequently heard on television networks that follow the stock markets by the minute, a support level is a price level at which a security tends to stop falling in price. Typically, the stock won’t break through this level because – at this bottom price – demand for shares outweighs supply.
Technical analysts – who chart market activity in an attempt to forecast what will happen next – say that a stock falling toward its support level is “testing its support.” It is considered a bearish sign when a stock breaks through a support level and falls even further.
The opposite of a support level – the point at which a stock is not likely to go much higher – is known as its “resistance level.”
