Adjust Your Withholding
When it comes to payroll withholding, you want to get it "just right."
If you over withhold federal taxes, you'll get a big refund. That's nice once a year, but you've sacrificed control of your dollars for the other 364 days. Why give Uncle Sam a free loan of your money all year?
If you underwithhold, you'll end up owing the IRS at filing time. Owing a little isn't too bad, but a big tax bill could be hard to pay. This could cause you to face penalties as well.
It's easy to change your withholding. Just give your payroll office a new W-4. And to make sure that form will get your withholding as close as possible to your eventual tax liability, you can use the IRS' interactive allowances calculator.