If you have extra taxes taken out all year, do you get it all back at tax return time?

Answer 1

You'd get the extra back at tax time. When you do your return, you calculate your taxes for the year, and show what you had withheld and paid in as estimated taxes. If you paid in more than your total tax for the year, then the extra gets refunded.

Answer 2

If you had some income that wasn't subject to withholding, like stock dividends, savings interest, gains on stock sales etc. then some of the "extra" you had withheld or paid in estimated payments would go towards the tax on those items. Also if you're married and filing with a spouse that had too little taken out, then again, some of your "extra" would go to pay the shortage of taxes on their income. If none of those apply, then yes, your "extra" would be refunded to you after you file your return. Keep in mind that what you've really done is let the government use your money at 0% interest, so you may want to claim more allowances and then ask your employer to split your check so that most goes to your checking account and part to savings. If they have a retirement savings program, start participating in that, especially if they offer a match on your contributions. That is free money you miss out on if you're not getting the maximum match that they offer. Hope these extra things help you develop a improved saving plan for 2007 and beyond.