Tax Refund

It's that time of year again. I volunteer my time and knowledge and do many friends, family, and pastors tax returns at no charge. (I'll receive payment someday.) Of those getting large refunds, they thank me and of those owing tax, they wonder whey they are not getting big refunds. We all like to receive money but in this case, a tax refund is deceiving.

A big refund means we allowed the IRS to borrow money from us interest free for the entire year. Most of those getting refunds from the people group I listed above are in excess of $1,200. That should be an extra $100 a month in take home pay. Who wouldn't like an extra $100 per month?

May I suggest that if you are receiving a large refund, talk to your HR department at work and have them help you fill out a new W4 for both federal & state. Then have a written plan on how you are going to use / invest the extra monthly take home pay. I know of many places paying interest of greater than 4%. (More on that later.)