It's no secret that there can be a big difference between your before-tax salary and how much you actually get to take home. But do you really understand where that money's going?

Federal and State tax, Medicare, and Social Security are the most common reductions. If you pay a portion of your health insurance premium, that amount is taken out first, before any taxes are calculated at all.

Then, Social Security, usually 6.2% of your pay, and Medicare, usually 1.45%, are taken out. Then other pre-tax reductions, such as 401k plan contributions are taken out.

Next, you pay Federal and State tax. That rate depends on how many exemptions you claimed on your W-4 form. The more exemptions you claim, the less you have taken out in taxes each check.

So is it a good idea to claim fewer exemptions, have more taken out, and get a big refund at the end of the year? "In theory, it's not a good thing because you've allowed the government to use your money for the entire year, interest free”, said Curt Day, CPA and co-owner of Wausau Tax and Accounting. “But for many of us, in reality, if you had that extra 10 or 15 bucks per check, you're going to spend it. You're not going to know where it is."

Thanks to the economic stimulus plan, your take-home pay probably went up a little in the last couple of months. But for some taxpayers, there could be a problem that will have you owing the IRS at the end of the year. “People working 2 jobs are getting this advance money from both jobs”, Day said. “At the end of the year they could run into a problem where they have not had enough withheld”.

Day says the same holds true for people who are receiving pension income in retirement, or individuals claimed on someone else’s tax returns. They’re likely receiving a tax credit they don’t qualify for.

In order to make sure you’re having the proper amount withheld, you can use the IRS withholding calculator linked to below.