Update Your W-4
Tax refunds may seem like “free money” or “bonus money,” but here are 2 reasons why you may want to update or correct your W-4 to reduce the amount of withholding.
If you’re struggling to make your monthly payments, or your budget is really tight, that extra withholding could probably be put to better use in your paycheck each month.
If your refund is large - for example, $3,000, that would be an extra $250 each month! You could invest that or pay down debt.
Allowing the government to “save” your money for you, in a sense, is relatable to putting it under your mattress. You’re not getting any interest on that money, nor can you use it. A better option, set up an automatic Savings Account – have that extra money withdrawn from each paycheck and deposited into a Savings Account. To help get your W-4 aligned with your tax obligations, visit your HR department or your trusted tax advisor.