Should I plan to have more money withheld than I owe, so I can get a big refund?
Author: Ted Farley
Website: http://www.Tax-FAQ.com
Added: Sun, Jul 23, 2006 17:52:28
Category: Tax Questions
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If too much tax is withheld during the entire year, of course you get a refund. Therefore, you can plan to withhold more money than you will actually owe, in order to get a big refund.
Some people use this method as a kind of savings account. However, it does give the federal government the use of your money interest-free for up to a year, so a savings account that pays you interest would give you a better return. On the other hand, there is no way you can tap into these extra taxes and withdraw them before you get a tax refund once a year, so it can be a type of "forced" savings for people who can't leave money in a regular savings account for a year.
keywords: Taxes | Tax | Withholding | Tax Refund About the Author:
Ted Farley answers frequently asked tax questions at PrettyGreatAnswers.com.
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