it seemed to me like owing $28 is the tax scenario that is desirable in general. She should not increase her withholding, she should just have $75 a month go directly from her paycheck into a savings account so she can get that $900 she needs.
i agree completely but unless someone has the self-control to put that money aside it's just going to get spent away b/c so many have the mindset that 'it's just $75 per month, it's not that much/won't make a difference saved'. $900 in one check is a nice chunk of change but they just cant equate that to being the result of $75 set aside 12 times over the course of a year.
it's not an uncommon mindset. i've known people all my life who saw tax refunds as their means of saving money, never considering that the same money received over 12 months via their paycheck could be earning some form of interest OR paying off those high interest credit cards sooner vs. later. this is something i've had to point out to dd whose doing her first full time employed tax return since graduating college. she works with allot of people in the same 'boat' as herself-single, no kids. renters... so income and deductions are similar. she hears them excitedly talking about how much they are getting for their returns and then she looks at the maybe $100 or so she may get and it can seem disappointing until i remind her that by getting those extra dollars each month she's able to throw more at her student loans such that she will be payed off and have saved in interest many times the amount of those refund checks her co-workers are getting.