When you're filling out your W-4 for your paycheck. Is it more beneficial to get more of your money during the year instead of one lump sum in your return.
2007-01-19 07:23:21 · 7 answers · asked by krista_guerrero 1 in Business & Finance ➔ Personal Finance
Getting back a big return is one of the worst things you can do financially. Instead of having that money have getting it to work for you all year you've been giving the US Govt a tax free loan.
Instead, get the money when you get paid and set up automatic deposits to an investment account like a Roth so you never even see it. It's a great way to start building a nest egg.
Good luck!
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2007-01-19 13:36:18 · answer #1 · answered by personal_finance_101 3 · 0⤊ 0⤋
It is totally up to you. It is sort of a built in savings plan if you have them take out more. I personally just make sure that they take enough to cover my taxes. One year I was so close that I owed only 74 cents on my return. Usually though, I get back in the neighborhood of $200. I have seen folks get $2000 or $3000 in their returns (this could make a big difference in their take home pay. Still---it is your choice. You could put the money in savings as I have seen some do, and you would be making interest on it all year in lieu of allowing the government to use it free.
2007-01-19 07:40:04 · answer #2 · answered by Doug R 5 · 0⤊ 0⤋
If you increased your exemptions on your payroll and got more money throughout the year, what would you do with it?
Invest it? Yeah right.
Cutting a check to the IRS on April 15th every year sucks. I know, because I keep doing it to myself.
The whole "why give an interest-free loan to the government" argument only makes sense if you do something useful with the extra money, which 99.99% of people would just spend away.
If you use your refunds for anything useful, like a vacation, debt reduction, whatever, just keep doing it.
2007-01-19 07:42:17 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Well let's compare. You give the government your money interest free for a year, and at the end they give it back to you.
Or, you keep your money, use it all year long, invest it and actually get a return.
I prefer to actually PAY money at the end of the year.
Keep in mind, if you owe over $600, you will pay a penalty, IF you paid less in estimated taxes than the previous year.
Good Luck.
2007-01-19 07:30:30 · answer #4 · answered by A_Kansan 4 · 0⤊ 0⤋
If you were married and your spouse wasn't working, your taxes would be lower. If your spouse was working though, you could end up having to pay at the end of the year if you didn't allow for both incomes when you filled out your W-4.
2016-05-23 22:11:38 · answer #5 · answered by Kymberly 4 · 0⤊ 0⤋
why loan the government your money interest free, it's best if you owe nothing and get nothing back, take home as much as your allowed it's better to stash it in a low interest earning savings account than get a tax return.
2007-01-19 07:34:49 · answer #6 · answered by Rainy 5 · 0⤊ 0⤋
its just your personal preference...personally, i take less during the year and look forward to a refund at the end but i also know ppl that make more during the year and get back less or no refund..it just depends of your own personal situation and preference...
2007-01-19 15:49:54 · answer #7 · answered by cocomax_00 2 · 0⤊ 0⤋