During that time, he's advised the wage earners among his clients to gauge their withholding to assure a refund. On a weekly or monthly basis, the difference in take-home pay is minimal, Wapnick says of overwithholding. The alternative to a big yearly refund, he says, is seeing the money frittered away on non-essentials throughout the year. Estimating tax liability with precision can be difficult. Held, a warehouseman who spent a career in the Navy, likes to estimate his tax liability a bit low, so that he ends up owing IRS when he files a return.
Some taxpayers plan so they can have it both ways.
Rather than splurge, he just put it in the bank. The extra contribution to the plan may draw a bigger matching contribution from your employer. So you've effectively given the government that interest. Anyone who owes money on high-interest credit cards should be putting every available cent toward retiring the debt. Total interest payments would be halved, and the debt would disappear in less than 3 years.