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Give Yourself a Raise.


I recently saw some stats that suggest close to 3 out of 4 taxpayers get a tax refund and that refund averages close to $3000.

If you're average, you might want to consider adjusting your paycheck withholding allowance. Instead of getting a $3000 refund, why not give yourself a $250/month raise! Or maybe you enjoy giving Uncle Sam an interest free loan :)

This works the other way too. If you're below average, meaning you owe money to the government for your 2010 taxes, you should also consider adjusting your paycheck withholding allowance. Unfortunately this will be quite the opposite of giving yourself a raise, but it might save you from writing a big check again next April.

Grab your completed 2010 tax return (no worries if you haven't completed it yet... you have until April 18th this year) and a recent paystub and visit the IRS Withholding Calculator. Simply use the numbers from those documents and, if needed, adjust them based on your estimates for 2011. And Shazam! The calculator will tell you exactly how many allowances you should claim on your Form W-4 (that you can then submit to your employer). The end result is that next April you should be about as close to even as you can be.

Even Steven.