Allowances on a W-4 are not the same as personal exemptions on the 1040, and they don't have to be equal. Allowances are supposed to be based on exemptions, but they don't account for extra itemized deductions. Therefore, when you have a lot of deductions on a 1040 that are not reflected in your W-4 allowances, you have too much tax withheld. The W-4 worksheet can help you figure what your allowances should be to compensate for those extra deductions. The higher the allowances, the less tax is withheld and the more money in your pocket.
Saving is good, but there's a better way.
Some brokerages have electronic-transfer options, where again the money can be taken and invested on a regular basis and be like forced savings. Use it wisely. Amy Higgins writes about personal finance for the Enquirer. The Cincinnati Enquirer , a Gannett Co. Inc. newspaper.