Would you rather have a larger paycheck or a larger tax refund?

alternately, you can state a specific dollar amount to withold on the w-4 can you not?


assuming it's fairly regular year after year and your circumstances aren't changing much, just look at your refund, divide by 26 - or however many checks you get a year - and have that amount taken out (probably should take about 10% off the refund total to leave yourself a little buffer.)



just a thought...probably a bad one, but I thought I'd throw it out there

[kv968]

Originally Posted by MonkeyMama

Now that is GOOD advice. I'll have to remember it. Though still no one I know wants to give up their refund - LOL.

Thanks MonkeyMama. I will admit though some the people that have taken that advice do tend to look at me with slight hatred in their eyes around this time of year. Especially when they hear everyone else talking about their HUGE "refund" checks. I just try to remind them that that's what they wanted and to go look at their 401k statement instead

[tabbycat31]

I work as a tax preparer.

My clients ask me that all the time, and I have a book that has charts of how much is taken out of a paycheck by exemptions.

Most of my clients I am honest wtih them. I say "if you are disciplined to save the extra $20/paycheck by all means go for it". That being said, most Americans will fritter away that $20.

Many people use a tax refund as a method of forced savings. Personally I'm claiming 0 on my w-4, but I've also changed jobs often (in 2006) and I'm expecting self employment income in 2007 so I want to keep it at 0 to avoid making payments.

[creditcardfree]

For all of you who feel you don't have the discipline to save the extra money from a larger paycheck, make it automatic. Set it up ONCE to have the extra automatically go to your savings account or your roth ira. Many employers have the option for direct deposit and can split your check to two different accounts.

[tabbycat31]

creditcardfree, I do have an automatic savings plan for MYSELF. I transfer $50/paycheck into ING. I claim 0 for other reasons, mainly job uncertianty and likely self employment income so I don't have to make quarterly payments.

However for my clients, it's easier said than done. Most of my clients are on the lower income scale, and many don't even have checking accounts. I'd say 75% of my clients do not have a savings acct.