Get Next Year's Refund Starting Next Pay Day

April 15 is the anniversary of the day Lincoln died and the anniversary of the day the Titanic sank. It's also the deadline for filing your tax return (For 2011, due to a weekend/holiday, the deadline falls on April 17). But hey, let’s look at the bright side:

• Taxpayers are receiving larger refunds. The average refund check for 2010 is more than $3,000.
• Taxpayers are getting their refunds in as few as 10 days with e-filing and direct deposit, getting what they overpaid through over-withholding returned to them quickly.

If you’re one of the nearly 75 percent of Americans who get a tax refund year after year, we can show you how to keep the good times rolling. With a little effort, you can start getting next year’s refund starting next pay day.

Sure, we all love our springtime refunds. But doesn't it make more sense to receive your money when you earn it?  And you can do just that by filing a new Form W-4, Employee's Withholding Allowance Certificate, with your employer to adjust the number of allowances you are claiming. You can claim an allowance for yourself, your spouse and your dependents, for example. Each allowance for 2010 basically makes $3,650 of your annual income off-limits to withholding. Claiming extra allowances on your W-4 will automatically decrease the amount of taxes withheld from your paycheck, increasing your take-home pay. You'll enjoy instant gratification from a do-it-yourself pay raise.

You've probably heard that by over-withholding in order to receive a refund means you are effectively giving the government an interest-free loan. You're better off steering that cash into savings or investments that make YOU money. But there's an even bigger issue at play here.

Habitual refunds can play costly games with your mind—and short-circuit meaningful tax planning. A huge refund may feel like a heavenly windfall, but what it really means is that you probably overpaid thousands—maybe tens of thousands—of dollars in taxes and simply recouped your own money. This can be painful if it causes you to overlook the tax consequences of your financial choices during the year, such as deciding which stocks to sell, whether to buy a rental property, or whether to transform a hobby into a business.

The prospect of getting money back also can lead to laziness when you work on your return. There's a good chance you'll work harder to shave the amount of extra tax you owe than to pump up an already fat refund.

In general, getting more money in your paychecks means a smaller refund at tax time.

If you want more money in your paycheck but are worried about getting hit with a surprise bill at tax time, try our free W-4 Salary Calculator. Just enter some information from your most recent paycheck and tax return, and we’ll help you estimate how many allowances to claim on your W-4 to get the result you want -- whether it's a bigger paycheck, or a bigger tax refund.