Decreasing withholding, bad or good?

[FAB1]

1.Would you rather have more money withheld from your pay and get the big "refund"

2.
Or is it better to take claim more dependants, have less tax taken out?

Seriously Thinking of following # 2 - keeping our money to invest on our own...Why? cut the Feds out until tax is due. In the face of the "hope" & changes that might be headed our way.

 

[CountryBoy]

1.Would you rather have more money withheld from your pay and get the big "refund"

2.
Or is it better to take claim more dependants, have less tax taken out?

Seriously Thinking of following # 2 - keeping our money to invest on our own...Why? cut the Feds out until tax is due. In the face of the "hope" & changes that might be headed our way.

I try to hit my refund to as close to $0 as possible. No need to give Uncle anymore of my money than necessary.

 

[WorkFE]

Does not matter, once they find out you're part of the "50% that pays taxes club" you will either get back a little of the outrageous amount you paid in or you'll owe some more to make up for the "We get back more than we paid in club"

Seriously, trying to break even is the best road traveled. Did not give out any interest free loans and not owe a big chunk at years end.

 

[alevin]

last year was first year I had to write a check-paid off the house the year before. This year it's the brokerage stuff that I'm still figuring out-that and the deal about MLPs. not enough there to really warrant hiring a tax consultant, but OTH I'd hate to be like the guy that accidentally owed 4 cents for a few years. will give it another whirl tonight.

 

[Scout333]

I try to hit my refund to as close to $0 as possible. No need to give Uncle anymore of my money than necessary.

Breaking even is the best policy. I look at mine quarterly and adjust as needed. Owing a large amount at year end is generally a bad idea for a lot of reasons- estimated tax penalties being one of the biggest. There are some ways to finagle it a little i.e. if you are employed withholding taxes are credited prorata throughout the year so if you cut back withholdings in the early part of the year you could increase withholdings in the last quarter to make up for the shortfall. Kind of a dangerous game though for the small benefit you get. Recommend pay as you go if at all possible.