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Many taxpayers love getting a big tax refund in April. For some, it's a slush fund that they might not have the discipline to build on their own. They look for several hundred or thousands of dollars back from the government to pay off some bills, make a large purchase, or otherwise improve their financial situation.

Tax preparers have been telling taxpayers for years that it makes no sense to let the government get a bunch of your money via withholding, and then refund it to you sometime later... without paying you any interest. Instead, you could decrease the withholding from your paycheck, and put the extra money in an interest-bearing account for yourself. You make a little on your money, and don't have to wait for the government to refund it to you.

And the recent news that California is going to delay tax refunds makes the case for decreasing your tax withholding even more compelling. The state is running out of cash, and has just announced that tax refunds will be delayed 30 days. Allowing the government to take more money out of your paycheck than you really owe in taxes, and then waiting for the refund, used to seem like a sure way to save money. Now with state governments getting a reality check after years of abusive spending, the idea that your tax money is safe and ready to be refunded to you isn't such a sure thing anymore.

Decrease your tax withholding so that the amount taken out of your paycheck adds up to what you'll really owe at the end of the year. Ideally, you should be even... little or no refund, and little to nothing owed. To decrease your tax withholding, you'll need to fill out a new W-4 form. You want to enter a higher number on that form to ensure that less is taken out of your paycheck.

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