Adjusting Withholdings

[explorer2001]

My life has stablized enough that I am considering adjusting my withholdings down to eliminate my annual tax refund. I have run a quick projection of my tax liability for 2012 and I should be getting around $4K back from the feds and another $1K from my state. (I'm still waiting on some 1099s.)

The key factor seems to be my mortgage interest. I had been filing things in as I got them and as soon as that went in my refund jumped from a few hundred to $4k. However, I'm also looking to refi my mortgage after tax season. Based on switching to a shorter term and a lower rate, I should be saving more than a third on the interest I'm currently paying.

Also just to throw another wrench in things - I get nearly 1/6th of my W-2 income from bonuses which are variable (but somewhat predictable).

So what would you do? Would you adjust withholdings now and worry about the taxes next spring? Would you wait to see what the actual numbers look like after the refi?

[niq]

Can you get an amortization table from your lender? You should be able to figure out how much interest you will pay over the course of the year from that, and figure out how that will affect your tax liability.

Not sure what to do about bonus withholding.

Via mobile doohickey

[explorer2001]

I'm sure I will get the interest details. At this point, I guess I just have to wait. But dang am I trying to be MM.

[aspentosh]

I would wait until you refi. Then you can adjust your withholdings for the rest of the year.