So you are getting a tax refund, huh? Sounds great, right? Not really – it means you have been giving the government an interest-free loan all year…with your money. Although I try my best each year to come out neither ahead nor behind, sometimes it just doesn’t work out that way. Take for example tax year 2007 – we owed $3,600 because of a few issues – but at least I wasn’t giving the government an interest-free loan! If you are getting a tax refund, here is what you should do for 2008:
See how many exemptions you are entitled to over at this page on the IRS website.
See what your withholding number was for 2007 (it might be written on your check), and make it a little higher for 2008.
File a new W-4 form with your company’s payroll department with the correct withholding amount. The form is available for download right here at the IRS site.
Simple, right? Now your paychecks will be a little bigger each week because you are not giving a loan to the government and waiting a year to get your money back!