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Ask Dave

How Much Should I Withhold for Taxes?

Brandon wants to know if it's better to withhold the maximum from his paycheck and get a big refund or withhold less.

QUESTION: Brandon on Twitter wants to know if it’s better to withhold the maximum from his paycheck and get a big refund or withhold less.

ANSWER: Any time you get a refund, it means you have paid in too much and then the government gives you your money back . . . without interest. So a refund is having too much withheld so you have a savings account with the government at 0% interest, and they pay you back every April. That’s all a refund is, so the goal is to not have a refund. The goal is to get your proper amount of money out and then not to have to pay more in taxes than was withheld. You don’t want any surprises at the end either.

Tax Pro or File Your Own?

Take the Quiz

Tax Pro or File Your Own?

Use this free quiz to help you decide which tax filing method is right for you.
 
Take the Quiz

Tax Pro or File Your Own?

Use this free quiz to help you decide which tax filing method is right for you.
 
Take the Quiz