I know that overpaying your taxes throughout the year equals giving the government interest-free use of your money. But still I think that getting a check for $2000 in the spring is better than an extra $40/week in your paychecks... especially because I don't want to have to owe money if we miscalculated a little bit. $40 a week disappears so quickly, and then maybe we'd have a bill from the IRS for $200 that we'd have to cough up. So no matter what the experts say, I still would like to learn to live on a little bit less per week, so we get a "bonus" later. How about you?

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Trust God. Whatever risk there is in doing so, the risk of not trusting in him is far greater. - Spurgeon

I have mulled over this myself. My dh claims 0 on his w-4 and we pay about $5000 in interest a year on our mortgage . We are not the greatest savers (I feel bad about not workin fulltime to help w/ bills so I let dh spend ). It comes in handy when we need home repairs or a vacation (going to sturgis this year!).

For us it is easier to save this way.

We prepay all of our utilities, insurances, ect. The only real bill we have each month is the mortgage.

Leftover money gets invested.

NO WAY!!! I hate getting that much from the government back because I am thinking to myself, "Darn that $2000 could have been $2100 instead if I had taken it out and put it in a CD." So, then I am angry at myself.

Just the way I think.

I've asked it before, but am asking it again, how do you know what to claim to make this happen. I am married with no kids, filing jointly, what do I do for my W-4, what do I claim? How do I make sure I won't be UNDER paying the IRS, as to avoid paying in later?
TIA.

I'm torn a bit, so I usually try to make it so I kind of broke even at the end of the year.

This year we will be ahead of the game because when i closed out one of my 401k's when I stopped working, I put a big chunk of it into a CD to pay the taxes on it. It appears though, that we will be breaking even on the gov't taxes, so we will be able to use the CD when it matures in January for bills and what not. Plus I made almost $10 in it! YES!

DH is going to raise his exemptions this year, so we can get more in the paycheck, and not get a bunch back. Besides, we should have our little tax deduction on record next year, so the gov't doesnt' need as much of his check anyways.

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Using the original poster's numbers, I'd get that $40 out of every paycheck automatically deducted into a separate high yield account, then put that amount into an IRA or something every year. Or a CD. We normally try to break even. We usually end up owing 400 to the feds & getting 350 back from the state or something along those lines.

It's always nice to get a big refund but I too get mad if that happens because I know all the money in interest that we lost over the year. So we try to fix it so we break as even as possible. So far we've never had to pay anything but usually get a little something back.

That is exactly what I would do and try to do. Didn't put it quite so easily explained in my post.

As far as how to deal with the deductions, I would talk to your HR/finance person. If they are any good, they can help you with it. You just take last year's taxes and sort of estimate how much to take out. It isn't an exact science, that is for sure. The IRS keeps changing the rules of the game in minute ways.

This is where I am on the issue! I know it's not the best route but I'm not exactly sure how to do it!