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Re: Tax Time
I don't let the government hold any money for me during the year. That way I can invest my tax return throughout the current year.
Example Jeckel, if you had filled exempt from backup withholding you would have received an additional $650 a month in your pay check (assuming you received all of your withholdings back - more if you did not). You could then invest that money during the year. If you deposited that $650 in a 5% savings account each month then at the end of the year you would have made over $1,300 in interest alone plus if you had an emergency during the year you would have extra money to pull from.
The down side to this is if you do not save that money and you owe taxes then you will be in trouble next April. And you will not get a tax return at the end of the year because you are getting it during the year. It is more of a headache and takes discipline to save the money instead of spending it but if you can do it then it is like getting a raise.
You can file for withholding exemption on your W-4 form when you start a new job.
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