Anticipating Tax Season

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So this week $5 Dinners ran a post on Tax Refunds and Personal Finance. It linked to this article advocating withholding less each month instead of receiving a big tax refund at the end of the year. This got me thinking about what our preferences are when it comes to taxes. 

While I understand the rationale of withholding less to have a bigger monthly check, that isn't something that appeals to us. I think it goes back to your job situation and relationship towards money. Since I have mostly worked as a freelancer not making a whole lot, I've never gotten a lot of money back at tax time. The most I ever received back as a single lady was $60. Once Luke got to experience a year of contract work too, he saw the difference in mentality towards taxes. As freelancers, you are responsible for paying your own self employment taxes. So there is no perk of someone else handling the withholding for you.
Also you don't have a "steady" pay check. One month you may make $3000 but be fortunate to even get $600 the next. So you have to learn to live at the bare minimum of your means. That way you stretch every pay check as far as it can go.
If you transition back to employee status (like Luke has), that mindset can change again. Our year of freelancing taught us the minimum we could live on without going into debt. As it stands now we still only have a small amount of debt and will be paying it off in April. We also don't have any car or house payments to worry about as this point. So we have trained ourselves to live well below Luke's monthly check.
With the amount he gets each month, we cover all our monthly expenses, are paying off our debt quickly, and still contributing substantially to savings. Now I can see how other people don't have this relationship with their finances. They have overspent in the past and have large debt, or they aren't living below their means so the prospect of having a few extra hundred dollars a month is crucial.
But for us, it isn't. Instead we are already saving each month towards 3 goals so far: a new car, a future baby, and our emergency fund. Once we pay off our debt we will add in our house remodel goal. As it stands, we save an amount we are happy with each month and come January, Luke will be getting a monthly bonus which will help us reach our new car goal even faster.
So while keeping our exemptions at 0 means Luke has a lighter check each month, it comes with 2 main benefits: (1) If I happen to not pay in enough to my self employment taxes through the year, I still shouldn't owe anything out-of-pocket in April, and (2) we should still get a hefty check back which we plan to use towards our anniversary like we do every year. With a May anniversary, that refund check comes at the perfect time to treat ourselves to something special without us having to budget through out the year for it. This year we hope to use it towards a summer vacation :)