Don’t Give Uncle Sam an Interest Free Loan

A small "Missed Fortune" being made by millions.

Do you get a tax refund each year?

How big is it? Is it over $1,000? Is it over $3,000?

I know several people who consistently year after year get a significant tax refund check every year. Most people either do this ignorantly or as a “forced savings plan”. Either way you are giving the government an interest free loan. It seems sort of backwards that if you owe the government money they charge you interest and penalties, but if they owe you they don’t pay you anything extra. Just recently we are seeing in California, and now in Kansas, that not only does the government not pay interest but for the time being, they are not going to even give you your money back at all! This is ludicrous. If they are refusing to give you back your money when they owe it to you they should then be paying you interest on that money at a minimum and should really be subject to penalties.

Well if you want to take accountability and responsibility and quit overpaying your taxes, you can simply adjust the exemptions on your W-4 with your employer. The calculations to do so can be found on the second page of the W-4. Or even better yet, you can utilize our 2009 W-4 Exemption Calculator to calculate it for you. Then simply download the blank W-4, fill it out and give submit it to your employer. Take accountability and responsibility for yourself. You can set up better forced savings plans that will actually pay you interest and that will allow you to access the money when you need or want it!