Try to make your withholdings match your tax obligation

By Michelle Singletary

Many of us have been told all our lives that it is more blessed to give than to receive.

That's true in many cases, but not when it comes to your tax situation. When it comes to paying taxes, it is better not to give the government any more money than you have to. Come tax time, it is better not to receive a refund.

If I was in front of an audience and said this, I know some folks would roll their eyes and look at me as if I had lost my mind. People pray for a tax refund.

"When I get my tax refund I'm going to pay off some bills," is a comment I hear frequently.

Others can't wait for a refund to buy something they've coveted all year.

To many, a tax refund is an annual windfall. But a windfall means something that is unexpected, unearned. This, on the other hand, is money you earned all year long. If not much changes in your tax situation and year after year you are getting a refund, that's akin to lending your money to the government with no interest. Why would you want to do that?

Look, the financially smarter thing to do is make some changes to your W-4 so that you receive more money in your paycheck during the year.

Do you even remember filling out a W-4 (Employee's Withholding Allowance Certificate)? It's a form you completed when you started your job. It's also the form that should be updated far more than most employees do.

As a wage earner, you pay federal income tax by having it withheld from your pay during the year. You can adjust your withholding by filing a new W-4 with your employer at any time.

Of course, if not enough taxes are withheld from your paycheck or you earn additional money that is not subject to payroll taxation, you might owe taxes at the end of the year. You should strive to have your withholdings match your actual tax obligation.

If too much tax is withheld during the year, you get a refund. At the mid-point of this tax-filing season, the average refund is $2,436 — a record amount and more than $200 higher than last year, according to the IRS.

If you received a large refund this year or expect to, you need to review your federal and state withholding information to make sure it reflects your current tax situation. If your tax situation changes — you get married, have a child, buy a home — you should fill out a new form.

The amount of money withheld from your paycheck is determined by the number of allowances you claim on your W-4. The W-4 has a worksheet to help you figure out how many personal allowances to take, based on what tax deductions or credit you expect to claim on your tax return. You can also use the IRS online withholding calculator at www.irs .gov. In the search box, type "withholding calculator." You will need your most recent pay stub and a copy of last year's tax return.

If you need help figuring out if you're having too much (or too little) withheld from your paycheck, get IRS Publication 919, "How Do I Adjust My Tax Withholding?"

Michelle Singletary writes for the Washington Post.