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Money & Taxes

You might not think much about money except there’s never enough. But did you know managing money is a skill? Scroll through this section for tips and places to get help with your money.

Reading a Pay Statement
In Colorado, a pay statement (sometimes called a pay stub) should include your name, Social Security number, employer’s name, pay period, gross pay, net pay, withholdings, and deductions. If you’re an independent contractor, your pay stub may not include all of this information.

Key Terms
Gross wages/earnings: the total amount of money you make during a pay period (if you are paid hourly, the gross amount equals the amount of money you are paid per hour times the number of hours you worked)
Net pay/earnings: the amount you receive as take-home pay
Pay period: the dates from start to end that you’re being paid for
Rate: the amount of money you earn per hour
Deductions: money taken out of a paycheck to pay taxes, health care, retirement, and so on.

How Earnings Are Taxed
Federal income tax: deducted as a tax to the Internal Revenue Service for the government. The amount taken out depends upon how many allowances you claimed on your W-4 and whether you’re married or not.
Social Security tax: 6.2% of your gross earnings.
Medicare tax:
1.45% of your gross wages and an additional .09% will be deducted if wages go above $200,000.
State income tax:
approximately 4.63% of your gross earnings. Your employer also pays the same amount of Social Security and Medicare taxes for you.

Budget Basics
A budget is a list of what you make (your income) and what you spend (your bills). A budget helps you plan your spending so that you pay for the important things first. It can also help you track where you may be overspending. Budgets don’t have to be complicated. They can be as simple as Expenses on one side of a list and Payments on the other, so you can see what’s coming in and what’s going out.

There’s a lot of information available online about how to make a budget that you can find by googling sample household budget. The best way to learn, though, is to take a class on budgeting. It won’t take long, and you’ll be glad you learned this life skill.

Where to Get Help

mpowered provides free one-on-one financial coaching sessions. You can get personal help creating a budget, improving your credit, reducing debt, and more. There are twelve locations throughout the metro Denver area where you can meet with a financial coach. Call 303-233-2773 to set up your first appointment. Click on the button below for the mpowered website.


NEWSED Community Development Corporation
NEWSED offers free money management classes that cover money myths, financial products and services, creating good credit, and a money makeover. Call 303-534-8342 to find out the schedule for the classes. They also offer a free business development class for entrepreneurs! Click on the button below for the NEWSED website.


Banking vs. Check Cashing & Payday Lenders
If you’ve been using check cashing services or payday lenders, please look into getting a low fee or free bank account.

For example, Bank on Denver has bank and credit union partners throughout the Denver metro area. Their partners offer free or low-cost banking accounts, and many offer free classes on money management. Their goal is to help people who’ve never had a bank account or had problems with an account in the past. Click on the button to learn more.more

Several credit unions are developing customer outreach programs to help people set up and use checking programs. We will add more information as soon as possible. Please check back.

Check Cashing Services Charge Too Much
Check cashing fees are usually a percentage of the amount of the check. For example, a 3% fee for a $1,000 paycheck is $30, which sounds low enough. But if you cash a $1,000 paycheck every two weeks for one year and pay those fees, that’s $720 a year!

Payday Lenders Have Sky High Rates
Fees for every $100 borrowed can be as high as $30, and annual percentage rates can go as high as 700%.

Paying Taxes
If you make over a certain amount of money, you’re legally obliged to file your taxes. There are several other reasons why you should pay taxes. For one, you may receive a tax credit called the Earned Income Tax Credit. You also can’t receive a refund from the taxes withheld from your paychecks unless you file a tax return.You may need your tax return to apply for subsidized housing. Finally, you need your tax return to apply for financial aid for college.

You can get personal help filing taxes from an IRS office at one of the four IRS offices in Colorado. Click the button below to learn where.

The IRS published a guide on taxes to help incarcerated people called Get Right: Facilitator’s Guide for Prisoner Re-entry Education Program. The Q & A section is very helpful for questions and answers about paying taxes after being incarcerated. Click the button below to see the guide.


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