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Typically one has a percentage (based on a W-4) of their pay withheld to cover one's taxes at the end of the year, it occurs to me that this is effectively like storing that money in an account with the IRS at 0% interest. Hypothetically would it not be better to calculate your withholding amount and just deposit that into a savings account every paycheck and just use that to pay your taxes. It seems to me that as long as a person is disciplined enough to not touch that account, one could generate some residual income that way. Also as an added bonus if you are in a state that treats a tax return as in income you are now not raising your taxable income. I am thinking there must be a flaw to my logic but I cannot figure out what it is. Is my reasoning valid?