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But thats a mistake.
Individuals who consistently receive large refunds may want to update their withholdings to avoid overpaying throughout the year.
Morgan also noted that a significant life change could warrant a withholding adjustment.
If you are getting a refund, you should understand why.
For example, if your refund is due to over withholding, you might adjust for the following year.
Use pre-tax contributions to your advantage, Ruiz said.
Make Accurate Payments
Accurate estimated tax payments help avoid underpayment penalties and year-end surprises.
Morgan often advises her clients to pay more frequently than the law requires.
While the law requires quarterly estimated taxes, it doesnt prohibit more frequent payments, Morgan said.
By making estimated tax payments monthly, you are better able to limit overpaying and underpaying.
Similarly, retirees can minimize their tax refund by withholding taxes directly from their Social Security or IRA withdrawals.
The goal isnt to get zero back thats a risky game, Ruiz said.
A small refund is usually the sweet spot.
Its enough to cover surprises, but not so much that youve been loaning the IRS your hard-earned money.
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