Tuesday, April 3, 2012

Free Money

As income tax payment time arrives, I always wonder about people who get income tax refunds.  This year the average refund is Taxpayers received tax refunds averaging $2,913 in 2011, down 3% from the average refund of $3,003 in the prior year, according to the latest filing statistics released by the IRS.
(To find out what happened to your refund, check the status by using the "Where's My Refund?" tool on the IRS website.)

My more liberal friends who believe government is the answer for everything must be happy to give the government an interest free loan.  When you are retired, you have to pay estimated tax every quarter and we try to not pay anything extra.  I really don't want to contribute to more Solyndra type fiascos.

I can sort of understand if people feel that they can't save on their own, but why not open a savings account and have the extra go to it.  At the moment the interest rates are low but it is under your own control.  The above article states: Direct deposit was the most popular way for taxpayers to receive refunds last year, with more than 79 million refunds deposited into accounts -- up 6% from 2010.  So why not do the work yourself?

1 comment:

  1. As a non-retired person, I have to pay quarterly taxes too. I consider it a personal failure if I get a refund. It is sort of tough because (for me anyway) there is no way in April to know what my income for the entire year will be. If I don't take out enough, I get penalized. Doesn't seem fair that I don't get an award if I pay too much during the year.

    Personally, I would rather just pay a big check when taxes are due rather than go through the guesswork at the beginning of the year. Unfortunately, most people would not be able to pay if the government let them save for themselves and write one big check.

    It still amazes me how many people I talk to who consider that refund "free money". Every year I get in at least one argument that if someone gets a big refund they should not be happy ... they should take corrective action next year so it does not happen again.

    I guess I'm just weird that way. Probably comes from upbringing.