Just in case you forgot, tomorrow is the deadline for filing your Federal Income Tax return (and likely your state return as well). Have you taken care of this or are you one of the millions who have yet to do so? (For readers outside the USA, you can just sit back and smile!)
My return has been completed and filed for quite some time. What I got back from Federal about offset what additional I owed for State.
Financial gurus advise to pay as little as possible throughout the year (without getting into trouble). The goal is to invest the money that was not withheld, in order to earn interest. Then make an additional payment when the return is filed. You come out ahead, because you earned interest throughout the year. That makes fiscal sense, especially seeing how the government does not pay interest on refunds.
Emotionally that doesn’t work for me. I become irked when I have income taxes withheld all year long and then need to pay more when I file. Although the amount of tax is the same, psychologically, it’s like paying twice.
Ideally, I like it when I have paid just a bit too much, therefore not having to pay any more and receiving a small refund. Of course, a large refund is nice, but it’s indicative of lost interest, which is not good.
From the government’s standpoint, they don’t like issuing refunds, so they would prefer you owe more at tax time.
I think they just want us in the mindset that we are always paying taxes—wait, we are!
Wordsmith Peter DeHaan is a magazine publisher by day and a writer by night. Visit peterdehaan.com to receive his newsletter, read his blog, or connect on social media.