Aside from the interesting property of having two "h"s in a row, tax withholding is evil. However, with proper exemption management you can reduce your yearly refund from or payment to the IRS -- and remember, getting refunds is bad, because the IRS doesn't pay interest. According to this article about refunds on the IRS website, the average federal tax refund is over $2000 -- $40 per week -- not even including refunds for state taxes. I recommend asking your tax advisor, if you have one, about the number of exemptions you should claim, or else use the IRS withholding calculator. The site is pretty handy, and you can also check on when your refund will be processed and how long it will take to get your money.
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I really pissed me of this year; I got a huge tax refund (mostly because of a new baby). I would have much rather had most of that money throughout the year. First thing I did after completing my 2004 taxes was to use that "Withholding Calculator" to change my exemptions.
Previous post should have read:
I got a huge tax refund (mostly because of a new baby) this year. I would have much rather had most of that money throughout the year. First thing I did after completing my 2004 taxes was to use that "Withholding Calculator" to change my exemptions.