Saturday, March 3, 2012

I Would Way Rather get a Tax REFUND!

As a pf blogger, I know that it is not in my best interest to get a tax refund because it means that I gave the government an interest free loan.  I should take the time to figure out approximately how much tax I will owe at the end of the year and adjust my withholdings.  I should calculate it and try to get as close to zero as possible or even owe a small amount.

I think that is a bogus idea.  I want a tax refund because it means that I paid too much money throughout the year and now I get it back.  I don't care about the interest that I lose.  I would much rather get a refund than risk owing any money to the government.  It is nice to get a refund and do whatever I like with it.

That said, I do think it is silly if you are consistently getting a huge tax refund above $5000.  With that large amount, it can really make a difference with your monthly cash flow.  Surely, you would notice an additional $450 or more per month in your paycheck.

I'm all about getting a refund.  Are you?  Or do you think it is stupid to give an interest free loan to the government?

12 comments:

  1. I'm with you on both. It sure is nice to get a big refund or any refund for that matter. But it is an interest free loan. We have gotten a $5000 range two years in a row so we adjusted our withholding this year.

    The issue we have with getting it closer to zero is we get a refundable credit (additional child tax). So, we cannot really get that amount in our weekly paychecks.

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  2. I prefer to get the tax refund, even though it is an interest free loan for the government. The past two years it has helped out with debt and so forth.

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  3. I agree. I like getting a refund instead of balancing at zero. I never get a huge amount, usually between $500 and $1000, but I like having that little extra all in one lump sum as a kind of "bonus".

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  4. I, too, would rather get a tax refund. I don't get a lot, but I don't like the idea of *maybe* having to owe the government at the end of the year. I'd rather be over, and get that money back. Plus, it's fun for me to allocate where the refund will go :)

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  5. I agree, it seems better to get something back than to owe. It doesn't really bother me that i'm giving the government an interest free loan because I like to think that the money is being used for something good like health care or education (and not for expensive hotels and fake lakes ;))

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  6. This year I'm happy to be paying the Government $43. With a divorce last year, I was afraid I'd owe a lot more than that. Next year I might get a refund, if the student loan interest can still be deducted, if not I might owe a little.

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  7. I want a refund! Damnit! haha I don't care about the interest I just want my money back. Last year I got an amazing refund since I started working in may 2010 but now it's much less. But I am glad that I am getting one at all.

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  8. I have enjoyed getting refunds when I've gotten them in the past. This year, we'll pretty definitely not see one, however; my wife got a bonus last year, and requested that she just receive the whole lump sum (without paying taxes). That money's sitting in a interest-bearing savings account, so we've probably made a few hundred dollars easily.

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  9. I like a refund of around $1,000... last year I got around $200 and was majorly disappointed! I use the refunds to plump up any account that is on the low side (usually vacation!)

    Anyway, interest rates are so low right now, over the course of a year a couple thousand wouldn't earn much at 1 or 2%...

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  10. I agree with you on this one. A small refund is actually pretty great, you might not get any interest but at least you saved something. Those huge refunds are definitely a problem though.

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  11. I struggle with this from time to time, but at the end of the day - I too would rather get the tax refund.

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  12. I want around $1,000.00 from the government at the end of the year. I think this keeps me close on the "not paying them" side and also a great way to kick start my new goals for the year.

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