Comments on: How to Adjust Your Tax Withholding

By: Justin Kubicek

Justin Kubicek — Tue, 07 Jun 2011 01:32:49 +0000

Is there anything we can do about our renters rebate? It seems stupid. I’m going to get 19% of what I paid in last year. I pay $725 now, and with 19% taken off it’d feel like I would be paying $588 per month.

By: Jim

Jim — Tue, 23 Mar 2010 18:23:59 +0000

Or an estimate of how much you’ll earn this year.

By: Ryan

Ryan — Tue, 23 Mar 2010 16:24:34 +0000

So I need my end of the year paycheck to fill out the info. on this calculator?

By: Shock

Shock — Fri, 04 Dec 2009 17:48:02 +0000

I review my withholdings every year and adjust when necessary. My goal is to get close to the break even point. It seems like every year my situation changes and I use the IRS withholdings calculator, but I still get a refund. The biggest refund comes from my state (Virginia) taxes, which seems to have a cap on the number of withholdings.

By: saladdin

saladdin — Thu, 03 Dec 2009 22:26:06 +0000

This is where Ramsey can come in. It’s not the “giving a free loan” thing as much as it is a behavioral thing. If you do not have the discipline to save/invest the money throughout the year then get a refund. But you have to use the refund for good, not evil.

But limit your refund. You don’t want to get a 5K refund. That’s just poor financial planning. If you want to get 1500 back sure but 5k is extreme. That’s a lot of money throughout the year that can be used to pay off debt or spend on beer and ho’s.

saladdin

By: Financial Samurai

Financial Samurai — Thu, 03 Dec 2009 21:43:18 +0000

I gotta tell ya, I’m one of the dummies who LOVES a refund!

Let’s say you did lend the government $5,000, you’re giving up what, $55 bucks in interest for the year based on a 1% savings interest rate?

Heck, take tht money away from me and keep it! I know I’d spend that tax refund instead of save, if it was divided into $410/month for 12 months!

By: Jim

Jim — Thu, 03 Dec 2009 17:46:33 +0000

I wouldn’t push my exemptions to the point of getting a loan, they might not like that.

By: zapeta

zapeta — Thu, 03 Dec 2009 17:43:50 +0000

My withholding usually ends up being pretty close to what I owe without a lot of changes. I prefer to get a (small) refund…I’d rather get a little back than have to come up with the money and pay them.

By: saladdin

saladdin — Thu, 03 Dec 2009 17:28:59 +0000

True. But if you use the IRS calculator you can get it down to a few dollars. I don’t think anyone here is saying just pick a number.

saladdin

By: pcallaghan

pcallaghan — Thu, 03 Dec 2009 17:21:31 +0000

I’ve gotta go through all my tax withholdings. With the purchase of a house there needs to be a change. Also am in the process of convincing my girlfriend to stop giving the government that free loan. Big checks are nice but come on, it could be a larger amount if you had that money up front.

By: John DeFlumeri Jr

John DeFlumeri Jr — Thu, 03 Dec 2009 16:22:47 +0000

If we make the mistake of under witholding too much there is a big penalty.

John DeFlumeri Jr

By: jsbrendog

jsbrendog — Thu, 03 Dec 2009 15:40:00 +0000

i went through all of this this past year after doing my taxes and being told that with my current withholdings i would be short and owe a ltitle bit this year, so i had to ajdust it. it was quite ocnfusing. simple once understood but confusing nonetheless

By: Chris

Chris — Thu, 03 Dec 2009 15:26:14 +0000

I have adjusted my family’s withholding to reduce the amount of my tax return and increase our cash flow. I would love to be able take an interest free loan from them for once.

By: NateUVM

NateUVM — Thu, 03 Dec 2009 13:46:46 +0000

For years, like most other people, I just liked getting what amounted to a bonus check in the mail (or via ACH direct deposit). It was like an automatic savings plan, but without any earnings.

Finally decided that this was a little silly, and adjusted my withholding. Now I take the difference in my paycheck and put it into the Roth 401(k) that my company is now offering.

While I probably should have done so, regardless, it was probably this new offering that gave me the initiative to make this change. The capacity to add to my “Roth” funds was too powerful to ignore (I already contribute the max to my own Roth IRA).