Chad 1978
Isaac 2008
Chad 1978
Isaac 2008Tuesday Tax Tip:
Your tax RETURN is the piece of paper you file with the taxing authority (IRS, state agency, whatever). YOU give it to THEM. You do not spend it. You do not get it back. You do not get a bigger one than your neighbor.
Your tax REFUND is the money you get back, if any, from overpaying the IRS, state agency, etc. throughout the tax year. THEY send it back to YOU. And here's the tip: you don't want one - you want the money in your pocket throughout the year. The size of your neighbor's refund is meaningless, and the size of your refund only has meaning in that it's the portion of YOUR money that has been overpaid during the year. You are just getting it back.
I've heard some people say that they overpay throughout the year because it forces them to save money they would otherwise spend. I understand that. But if you're disciplined enough to have that forethought, there are better ways to save that money. You're basically giving the government an interest-free loan. Instead of overpaying, simply calculate the difference and put the money in a real savings account. Even if it's low interest, it's better than nothing. Most companies can do this for you automatically, or you can quickly set something up with your bank to accomplish the same thing. Then you have control over your own money, and if something comes up and you need it, you got it.
I always thought getting a nice tax refund was a good thing. Then I married a CPA and was shown the light. Most people say (and I was one), "I'm getting a thousand bucks! Woo hoo!" In my house, it's more like, "We're getting nothing! Ha haaa (evil laugh)...I win!"
Your tax RETURN is the piece of paper you file with the taxing authority (IRS, state agency, whatever). YOU give it to THEM. You do not spend it. You do not get it back. You do not get a bigger one than your neighbor.
Your tax REFUND is the money you get back, if any, from overpaying the IRS, state agency, etc. throughout the tax year. THEY send it back to YOU. And here's the tip: you don't want one - you want the money in your pocket throughout the year. The size of your neighbor's refund is meaningless, and the size of your refund only has meaning in that it's the portion of YOUR money that has been overpaid during the year. You are just getting it back.
I've heard some people say that they overpay throughout the year because it forces them to save money they would otherwise spend. I understand that. But if you're disciplined enough to have that forethought, there are better ways to save that money. You're basically giving the government an interest-free loan. Instead of overpaying, simply calculate the difference and put the money in a real savings account. Even if it's low interest, it's better than nothing. Most companies can do this for you automatically, or you can quickly set something up with your bank to accomplish the same thing. Then you have control over your own money, and if something comes up and you need it, you got it.
I always thought getting a nice tax refund was a good thing. Then I married a CPA and was shown the light. Most people say (and I was one), "I'm getting a thousand bucks! Woo hoo!" In my house, it's more like, "We're getting nothing! Ha haaa (evil laugh)...I win!"
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