It's tax season again, and most Americans are happy anticipating it for one thing- their tax refund. You can't wait to get your check from the United States Treasury, but why?
Don't you realize that you're not earning anything? You gave the IRS and interest free loan, and now they're just giving it back.
Jeff Schnepper said it best in his MSN Money Article:
"People just don't learn. They want that check from the government. But I can give you the same deal.I hereby offer to allow anybody reading this to send me money.
I'll take cash, checks, money orders, even food stamps. Send me as much as you want. And I promise -- on my word as MSN Money's tax expert -- that I'll send it back to you on April 15, without interest."
It sounds ridiculous, but that's the point. The same thing happens when you get a tax refund from the IRS.
You Need Willpower, Not a "Government Savings Plan"
Many taxpayers anticipate their tax returns anxiously, but what if you didn't have to wait? What if you always had that money on hand to save, invest, or spend?
Invest your funds, and you'll get a return and make more money instead of just letting the IRS borrow it (again, might I add, interest free!)
Without Enough. No Less, No More.
If you're a W-2 wage earner like most, talk with your payroll department to adjust your withholding so you're paying just enough. You should be covering the minimum amount you'd need to pay to the IRS to avoid IRS interest and penalties.
Check out Jeff Schnepper's article to learn how to avoid interest and penalties, and what you should do to avoid tax refunds when you are making estimated tax payments, if you make over $150,000, or if you're paying through withholdings.
Remember… withhold just enough. Don't let the IRS save money for you: do it yourself. Invest it yourself. Try it this year, you'll see how nice it is to earn a little more with each paycheck.