Tax Refund: What’s Wrong With That?

Posted: January 27, 2011 in Uncategorized

Here is something to think about… What is wrong with a Tax Refund? I like this explanation..

MSN: It’s not like you’re gaining anything. That money was always yours. The feds are just giving it back. And that’s the point. When you get a refund, what that really means is that you’ve given the federal government an interest-free loan. You’re just getting your money back.

  1. mdebusk says:

    I learned this in a tax accounting class in college. Such a simple idea, and so many people refuse to get it. “I got back five grand this year! Boy, I really stuck it to ’em! Uncle Sam hates me! Haha!” Um… no.

    And lots who do get it still won’t fix their W-4s. They call it “forced savings” or some other nonsense. I point out to them that their employer is likely able to split their direct deposit two ways; open a savings account and send ten percent to it.

    Just about every year I get back from the Feds about a hundred bucks, which I then send to the state. Works out great, and I get to earn interest, dividends, and capital gains on my money.

  2. Chad says:

    I just fixed my deductions so I should be close to zero. I always offer to others to fix their deductions, then give me the difference, I’ll invest it, and give them back the principal the next year in April.
    I did just open a new mutual fund that gets the difference in the deductions, but an even better idea is to open an IRA mutual fund, so you also get the tax benefits and make out even better!

  3. gypsy says:

    Makes you wonder what all those tax refund companies truely get out of all this.. I am sure they do not explain to their customers they (the customer) does not benefit by giving the gov’t interest free money for a year. When you see their commericals their focus is on how much money you can be getting back!

    The commericals should say “Woo hoo.. I lent the government $5k in a no interest loan for a year.. and now I can finally pay my mortgage!”

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