Tax Refund
I don’t know about you but I totally disagree with the financial experts who tell us to avoid tax refunds. The financial gurus tell us to claim as many dependents on our W4s as we can, but not too many that we end up owing tax at the end of the year.
I like getting a refund, and I usually try to plan ahead as much as possible to get around $10,000. Now I could just deduct $833.00 a month from my salary and get about $300 interest and actually end up with $10,300.00 by the end of the year. Maybe I could do better investing it in a money market or a stock.
How fun is that?
I am not sure about you, but I would have a hard time taking $833.00 out of my pay check every month, because I already pay myself first, have a 401K, and take out the maximum FSA ($3600.00). I take a lot out of my check every month already. So I let the government do it for me and I don’t even think about it.
Get the psychology? I forget it happens and then as January rolls around each year I start to get excited about my check that will come in March. I own a business in addition to working fulltime, so February is the time my CPA gets my business taxes figured out.
I just got my refund today! Deposited in my account and I feel good. I use TurboTax, the web version and it walks me through every step of doing my taxes and then sends it electronically to the IRS. 48 hours later the IRS sends back a message and tells me if it accepts or rejects my return and if all went well, it takes about two weeks before I get my money.
I just really like getting a nice chunk of change each year, even though the government was holding it for me and I was not getting interest on it.
I exchange the practical with the less prudent option and have fun. I am investing half of it in home improvements and a condo on the beach for a week this summer. The other half - well I paid myself first.
So to all of the tax experts and financial gurus, I think you are wrong. I just spent $300 or even $500 to play this game and I had fun!
(Even if it was financially stupid)
Comment by Jetting Through Life
Ooooh… My biggest thing is people relying on their returns. In a perfect world, you shouldn’t be getting them at all, that is if the proper amount has been taken out of your checks for the entire calendar year.
Hope all is well!!
XXOO,
JTL
Comment by Ananke
I like getting a big tax return back as well. Or any tax return. But I’ve found that there’s one very important thing you have to do before this can happen. You have to sign it. For the first time in over 20 years, I forgot to sign my freaking tax return and I got it back in the mail yesterday. Ccccrrrrrraaaaaaappppppppp!!!!!!!!!!! Ugh, what a blonde moment.
Comment by Anonymous
Eric,
You’re right. The financial gurus say that you shouldn’t do this but I agree with your position.
It is nice to get a check in the spring and kind of feels like free money (not IRA, 401K, investment, etc).
-john
Comment by Dave
We just got the news n our taxes. We normally get a couple thousand back. But this year we are getting $200 back, and we owe $300+ on state. PPPLLLLLTTTTT!!!!!
It turns out that my employer was not taking out very much. Of course I am the one that chose the deductions, so PPPPLLLLLTTTTT!! on me!
It could be worse, I suppose. We look forward to a fat return so we can pay off bills. PPLLLLTTTT!!!