It’s official now. This is the first year that I actually owe taxes rather than receiving a refund. I used to love getting the tax refund since it seemed like free money, and I wasn’t really expecting it. Of course I’m sure you’ve all heard that getting a refund is essentially giving the government an interest free loan, but most people out there don’t view it that way. All you have to do is listen to a few conversations around this time to find out how excited people are about how much they’re getting back and what they’re going to spend it on.

This last year I decided to change things so that I wouldn’t get as a large a refund. I figured there were plenty of things that I could do with the money that would be more beneficial than to let the government hold on to it for me. And all you have to do is change the number of exemptions that you claim at work on your W-4. You can also change this number throughout the year if you think an adjustment needs to be made.

I will caution you though that you shouldn’t change your W-4 and then just go spend the extra money like usual. You’re still going to owe the same amount of taxes no matter what exemptions you choose. You just have control over how much you pay when. It’s never a good scenario when tax time comes around and you don’t have the money to pay them because you spent everything during the year. If that’s you tendency then you may not want to mess with things and continue to get a refund every year.

I’m not going to say that I enjoy having to write the government a check for taxes owed, but knowing that I was able to put the money to work for me rather than for them does make me feel better.

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