Cement, point taken and I was by no means trying to tell you what to do. In cases like this the person usually does not know how to fix it and doesn't realize that they are basically loaning the Feds the amount of their refund interest free so I show them how they can adjust their W-4s or increase the % on their 401k or open an IRA. Like you, they see $$ but, unlike you, they don't do it on purpose. We each have to do what we feel is right for us. Again, I certainly was not trying to tell you what to do and apologize if that is they way it came across.
I got back just under $2,000 combined, have 20% going to my 401k and claim S-7 Federal, S-1 NYS. For some reason my refund from NYS is always much lower than my Federal which is why I keep my withholding at S-1. Next year I will no longer have the college deductions for my daughter, which is why I jacked up my 401k. I am expecting a fairly large sum of money this summer ($30-35K) which should pay off most of my bills and will allow me to max out my 401k, at which point I will adjust my Fed to S-9, which is the most you can claim online as you have to go through HR to go above that amount. I also hope to open an IRA but am not sure if it will be a traditional or Roth--I will have to research both options. The 20% and S-7 leave me about the same take home as if I were to have 5% and S-1 with a much larger tax credit for my 401k. There is a calculator either on the 401k website or online which allows you to figure out which combination of % and withholding gives you the take home pay that you feel comfortable with.