Tis the season for tax refunds, right? Well here's a tip: if you owe taxes of more than $500 or are due to receive more than $500 you are not doing your taxes right!!
Let's look at taxes a different way: at the end of the year you calculate your tax bill for the previous 12 months. If you didn't have enough money withheld from your paycheck, you now have to scrounge up the bucks to pay your bill. If you are getting quite a bit of $ back, CONGRATULATIONS, you just gave the government an interest-free loan out of your own pocket.
Unless you have no ability to save for a future purchase on your own whatsoever, don't have the government save your money for you. Adjust your withholding on your paycheck at work so that FED takes less $ out of YOUR pocket every time. Wouldn't you rather have YOUR $ when you EARN it?
It took D&I two years to fine tune our withholding (it's now M5 or M6), but now we get a small refund ($350) from the FED and turn around and use it to pay our STATE taxes. Evens stevens. And we get the max of our paycheck every single time. So if unexpected expenses arise, etc., MY $ is available when I NEED it.
PS I just think it's silly all these tax preparation ads out there saying they are better because on average they get a higher tax refund than the other companies. Do you know what that means? They just have more chumps use their software -- chumps that like to not have their cash when they earn it.