Thankfully, I've never had to pay federal taxes. I've had to pay state before, but never more than $50 or so.

Last year, I had $10 extra taken out each month, so that hopefully I'll at least break even with state this month. I usually get a few hundred back from federal. Nothing too exciting, but better than a kick in the pants.

So you can increase it in a set dollar amounts? That'd be perfect. How do you do it? And what do you do with your "refund" (that kills me because it was your money all along, so they decide to give your money back to you???)?

Talk to your payroll clerk. Most places do it on computer and it's not problem. Figure out what you need. 5.00 per week would make you pay $260 a year more. If that is too much, wait a few months to take out the additional.

Now, if the payroll is still being done by hand, the clerk will probably hate you forever.

Yes, if you find yourself not having enough withheld, then the payroll department of your employer does not have sufficient information to process their withholding accurately. When you hire on, you fill out a form for tax purposes. You are the one responsible to let them know how much they need to hold out. It can be affected by changes in your spouse's employment, changes in family size, second or third jobs you take on after hiring in. If you are getting divorced or married, you should check their information to see that they are correct. IOW there is a difference from how much they withold for single filing individually or jointly.

As for the Uncle using your money and not paying you interest, lol, believe it or not, they prefer you NOT overpay. There are even penalties for people who use their witholding as a Christmas club account.

You'll have to fill out a new W-4. There should be one on file where you work, showing the number of allowances you currently claim; then you show the additional amount you want taken out on line 6. Perversely, doing this can involve line after line of entries on worksheets. Some of the most common items, and things that affect low-income earners, are the most complicated.

Here is a link that might be useful: Form W-4

don't forget that in 2009, you may have a big change in your withholding status.

Yeah, I just went to my account clerk at work and she told me what to fill out. And we only get paid once a month, so it came to $10 a month for me.

And what do I do with my refund? I usually pay bills.

Clerk?! I wish. That's one of my biggest problems in getting this done. Accounting can be done in so many differet ways... and I get a different person every time. In a place that is as big as a city (21,000 people in one location), personal service goes out the window. Sounds like I need to wait until A) my marital status changes and B) Obama's legislation is finished causing more tumult. Get a hold of my current W4, which I haven't done yet, and then talk with them to make certain to be out a bit less money the next go round. Got it. Ok, thanks!

But no one told me what they do with their refunds. Do you splure and get something totally fab or put it right back into the pot?

We aim NOT to get a refund: all the advisors say you should do what you're doing: aim to have to pay a little at tax time, and earn interest on the money in the meantime. Sometimes it works, sometimes not. If there's a refund, it goes into the savings account.

I mailed our stuff to the accountant yesterday - this is the earliest I've managed to get myself organised! (And the accountant is worth every penny, just for the slow-stress factor).

Believe me when I say we don't have a lot of money! But we've paid quarterly taxes for years and have usually ended up having to pay a little extra at tax time. Our accountant adjusted our quarterly payments so that the last two years we've actually gotten a refund, but we've had it applied to the first quarter taxes--which are due the same date--April 15--as the yearly taxes! I think that's a crock! Oh well, I'm just thankful that so far we're still able to pay them. :>(