When you think about it, getting a refund check means that you let the IRS use your money throughout the year without paying you any interest. Wouldn't you rather have the money during the year yourself? Here's how you do it. The IRS allows you to increase the number of dependants on your W-4 withholding form, meaning that less will be withheld for taxes from each paycheck. In the past, if you claimed greater than nine dependants, an explanation and approval may have been required. But the IRS has lifted this restriction, allowing you to voluntarily increase your dependants claimed.

This lets you have more money in each paycheck instead of "loaning" the money to the IRS and having to wait for a refund.

But let's not go overboard...you should only lessen the periodic tax withholding to match the expected refund. This way you are taking your refund as you go; instead of letting the IRS hold on to it. There is even a nifty calculator the IRS has provided for free, which lets you see how a change in withholding will affect your paycheck.

Here's the link to the free withholding calculator: IRS Bean Counter

Managing your withholding can also be a great tool if you are currently renting, but are about to buy a home. The new housing expense may be greater than the rent payments, but the new home will give you some important tax deductions. By adjusting your withholding when you buy a home, you can get the benefit of the new home deductions spread into each paycheck...which can make that new home payment a lot more comfortable.

Before you make any changes, you want to be sure you are balancing the amounts carefully and correctly, so it is always a good idea to check with your tax professional. If you want a referral to one, call us, we're here to help!