# Should you get a tax refund? Here's what to know about withholdings, estimated payments

Receiving a big refund at tax time may feel like getting a windfall, but you probably know the old advice that you shouldn’t give an interest-free loan to the government.

Yet tax and finance professionals say it’s a bit more nuanced than those two options. With some caveats, they say, most people should withhold or make estimated payments throughout the year that get them as close to what they will eventually owe as possible.

“I typically don't want our clients to be getting a huge refund,” said David Alvarez, a financial adviser with PAX Financial Group, in San Antonio, Texas. “If you're overpaying, it's not like the government pays it back with interest. You obviously don't want to be surprised with a huge tax bill, and there could be penalties for underpayment. So as close as you can get to net zero is ideal.”

If it is a mystery to you – say you’ve had some changes in your personal or work life – you might want to invest in some professional help in the future. Having a good sense of your tax liability throughout the year is also important if you ever need to file for an extension, said Dan Hoicowitz, a CPA with Cleveland-based Larry Hoicowitz CPA.

On the other hand, if you know you’re bad at saving, siphoning off a little more than necessary with every paycheck can be a helpful hack, said Rachel Elson, a San Francisco based wealth adviser at Perigon Wealth Management.

“But if you’re going to do that, then you have to commit to doing something productive with the refund money,” Elson told USA TODAY.

What does “productive” mean? Use that money to get your financial house in order, whatever that means for your unique situation. If you have debt, pay that down first, because the interest you’re paying to a lender is undoubtedly higher than anything you’d receive from a savings account or other investments, Elson said.

If not, start or make more payments to an emergency fund. You could also fund an individual retirement account, including for the year just ended if you’re doing it before the April 15 deadline. If you’re going to use the money for savings, make sure it’s a high-yield savings account, Elson said.

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