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Adjust Your Withholding

Most Americans pay the bulk of their annual tax bills via payroll withholding. Through this process, a percentage of your pay is taken out each pay period and sent to the IRS, where it is credited toward your final tax bill. In 2011, the average tax refund was over $3,000, according to the IRS. That's $250 a month! That means you've given Uncle Sam free use of your tax money – without receiving any interest. The best course, tax experts say, is to adjust your withholding exemptions so your tax payments will match your actual tax liability.

Sources: irs.gov, bankrate.com

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