Some people prefer to write a check to the IRS each year, holding on to the majority of their money until early April so they can maximize their interest. Others plan to get their “taxes due” as close to zero as possible. Finally, some prefer to over-withhold to receive a large refund. (This is a trap! The government earns–and keeps–interest on your prepaid taxes. That’s interest you could be earning.)

Here is a simple saving plan for 2011:

1) Know What You Owe.Many laws have changed, so the first step is to review your W-4. Visit www.irs.gov and search for “withholding calculator.” After entering some information from last year’s tax return and your current paycheck, you will see a good estimate of your 2010 taxes and a recommendation for changing the allowances on your W-4. Check with your accountant to make sure you calculated everything correctly.

2) Commit to Saving. Depending on your situation, your new withholding could net you several hundred dollars per paycheck. Don’t spend it! Immediately move this money into a high interest-earning account, such as a Money Market or CD. Automatic deposits are a convenient savings tool and are strongly recommended.

3) Find Something “Interest”-ing to Do.Congratulations! Your money is working for you. Yes, you may end up writing a check next April, but you were smart. You, not the government, have earned interest on your money all year long and your “refund” is already in the bank. How will you spend it? New big screen TV or family vacation? Or continue to save for a major purchase, like college tuition or retirement.