Refunds are good??

I hear it every year.  Don't you? People love to brag about their big tax refund.  Sure, it sounds good. Then you need to stop and think about it for a minute. Do you realize that you have just given the government an interest free loan for the past year? Your employer took taxes out every paycheck and sent them to the government. The government used them for the bailout and then waited for you to file your return to give you back what you overpaid. There's a better way. Have less taken out from each paycheck. Have the extra automatically transferred to a savings or money market account. That way, you get to keep your extra money. If you don't need it along the way, great. If you do, you don't have to wait a year to get it back.

I understand some people like to save at the bank of Uncle Sam, but he pays even less than your neighborhood bank. You should control your refund. All you need to do is fill out a new form W-4. The higher number of exemptions you claim, the less tax dollars that get taken out.  Just don't take out so much that you end up underpaid.  Figure it this way.  If your refund last year was $1,000, chances are this year it will be about the same. For most people, one tax year looks very much like another. If nothing different happened, your refund for this year is likely to be close to what it was last year. That $1,000 refund is about $20 per week. You don't even have to change the number of exemptions. Simply complete the new W-4 and ask your employer to take out $20 less per week.  Then go to your bank and set up an automatic transfer from your checking account to your savings account. You should also know that you can fill out a new form W-4 as many times as you want. There is no annual limit. If what you're doing isn't working, change it.

Remember, it's your money. Especially in these tough times, you need to watch it very carefully.