Last year after getting the largest tax refund of my life, I decided to change my withholdings (I previously claimed Single and 1). I'd much rather have the money each paycheck than let the government borrow it interest free. I did the "Deductions and Adjustments Worksheet" (aka the 2nd page of the W-4) to calculate what I should be claiming, then submitted the new W-4 at work to implement it. I would only know how well I guessed though when I did my 2010 tax return.
This week I used Free File (as recommended in a previous entry) to do my taxes. Since you enter all your income data first, it made me a little squeamish to see the estimate that I would owe over $800. However, after entering all my deductions, it looks like I'll get a couple hundreds bucks back. I need to double check my entries of course, but I'd say that's going to be the final result. Whew, good guess!
Note: Due to very late in the year tax changes by Congress, if you itemize like I do the IRS won't accept your return until mid-February. The program I'm using will let me e-file now and wait for notification that the IRS has accepted my return. I'm guessing I won't have my refund until the end of February at the earliest. Yet another reason to not overwithold.
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