I have my withholding set in such a way that I typically receive either a small refund or owe a small payment. (About $50)

I always hear talk from my co-workers and friends like, "Man, I can't wait until I get my HUGE return this year! I'm thinking 60" Samsung!"

My typical response is usually, "You do realize you could take that money that's being withheld and invest it throughout the year and end up with far more money than you're being handed when you file for your HUGE return, right?"

Their response? Crickets and a blank look...

Am I missing something here? Why would someone deliberately have their withholding such that they are having too much withheld? I'm not criticizing...just seeking a greater understanding...

Forced savings. These are people who probably would just blow the money if they were getting it at a rate of $100 per month, but if they get a $1,200 refund at the end of the year they will actually spend it on something useful, or at least memorable.

Also there are some out there who just don't like the idea of having to pay Uncle Sam on April 15, or who won't have the money to pay their taxes. By setting themselves up to get a refund they won't have this problem.