After much procrastinating, I finally managed to finish filing my taxes this evening. Not to brag, but I’m getting a fairly decent tax return. As I was dreaming about converting my tax return into small change so I could swim around in it (I’m a child of the 80’s, I always looked up to Scrooge McDuck), I realized why it’s called a tax return. The government took more taxes out of my pay than they were supposed to, so they return it a year later.

Now the U.S. government has been sitting on my extra money for the past year. Do you think they just stuffed the money under a mattress and called it a day? I don’t think so. For an entire year, the government was earning interest on my money. But not anymore, I’ve learned how to fix it.

What you need to do is determine what your tax liability is. Your tax liability is how much you’re on the hook for each year. By determining the proper withholding for your taxes, you neither owe money nor get a refund come April 15th. Thankfully, the IRS has provided a withholding allowance calculator to do all the math for you. Once you’ve figured out what your withholding should be, you will need to fill out a new W-4 form for your employer. Your changes should reflect within your next few paychecks. If you typically get a large refund every year, you will notice a small increase in your take home pay, since the government isn’t withholding any extra funds.

So what should you do with your new found cash every pay period? Don’t spend it, invest it. The U.S. government has been earning interest on that money for years, and now it’s finally your turn.