It depends on when you're setting the goal.

1. When you have finished the year and you are filling out tax forms, your goal is to get as large of a refund as possible.

2. When the year begins afresh and you are earning money and paying taxes, your goal should be roughly to pay exactly the amount of tax owed so that at the end of the year you don't have any refund or tax owed - it's the same as getting your tax refund right away rather than waiting until after you file taxes. So you want your W4 set up appropriately (assuming you're talking about the US).

I think (1) is obvious. For (2), imagine you start the year with the goal to get the largest possible tax refund at the end. Well that's simple - fill out the W4 and on line 6 ("Additional amount, if any, you want withheld from each paycheck") tell them to withhold everything. Then at the end of the year you'll get a huge refund. Of course in the meantime, you've made an interest-free loan to the government, and you've probably had to take out a high-interest rate loan from your bank or credit card. Obviously this is bad.

An argument could be made that it would be even better to slightly underpay your taxes (but not enough to owe a penalty). Ignoring human weakness, this is correct. If you have the discipline to set that money aside in a safe place, that's okay. If this would cause you to spend that money (or even save less of your other money), then this is a bad idea.

It depends on when you're setting the goal.

1. When you have finished the year and you are filling out tax forms, your goal is to get as large of a refund as possible.

2. When the year begins afresh and you are earning money and paying taxes, your goal should be roughly to pay exactly the amount of tax owed so that at the end of the year you don't have any refund or tax owed - it's the same as getting your tax refund right away rather than waiting until after you file taxes. So you want your W4 set up appropriately (assuming you're talking about the US).

I think (1) is obvious. For (2), imagine you start the year with the goal to get the largest possible tax refund at the end. Well that's simple - fill out the W4 and on line 6 ("Additional amount, if any, you want withheld from each paycheck") tell them to withhold everything. Then at the end of the year you'll get a huge refund. Of course in the meantime, you've made an interest-free loan to the government, and you've probably had to take out a high-interest rate loan from your bank or credit card. Obviously this is bad.

An argument could be made that it would be even better to slightly underpay your taxes (but not enough to owe a penalty). Ignoring human weakness, this is correct. If you have the discipline to set that money aside in a safe place, that's okay. If this would cause you to spend that money (or even save less of your other money), then this is a bad idea.

So I'd really want to highlight some of this depends on your own financial discipline - is it better for you to have the money right away so that you can make good choices with how to use it now, or is it better for you to put the money somewhere out of reach so that you won't spend it on impulse purchases? (and recognize that there are ways to put it out of reach and earn interest on it rather than spending it - one good choice for you would be a Roth IRA)