They Say it Like it’s a Bad Thing

You can tell that the tax deadline is quickly approaching, because bloggers everywhere are offering tax tips at every turn.

Lifehacker recently presented a Withholding Calculator (via Kiplinger) that helps you determine if your employer is withholding too much money out of each check.

Really? You need a calculator for that? If you get a big refund every year, they’re probably withholding too much. Simple.

There’s a lot of different opinions on over-paying taxes through having your boss hold too much of your money.

Some say it’s tying up money that could be spent paying bills along the way. And that’s a perfectly valid point if you’re one of those extremely responsible types who watches every dollar and shovels every extra penny they can afford towards aggressively paying down any debts you have.

And then there are the rest of us. If we wind up with an extra $20 bucks in the checking account at the end of the week, we’re just as likely to take at least $10 of it and make a couple of extra trips to the coffee bar for that nice Snickers latte we like so much. (Although I will admit that I’ve gotten a lot better at paying bills than buying lattes.)

There’s something nice about getting a big chunk of money back every April. (Or February, or March, depending on how quickly you’re willing to bite the bullet and just do the tax returns.) The problem is that there’s a big temptation to use that refund on something you don’t really need rather than paying off a bill that you need even less.

If you’re the disciplined type, or if you’re at least able to fake it pretty well when the money actually arrives, I really don’t see anything wrong with having them take a little more than they should, then getting the refund back. The catch is that you have to be willing to put that refund toward paying bills or in savings to help you prepare for emergencies.

I look at it as a Christmas Club account. There’s no interest to be earned, but it’s still a nice bonus when you’ve recovered from paying off all those Christmas gifts after the first of the year.

Incidentally, the tax deadline for those of you who know you aren’t getting a refund and, therefore, are waiting to file, is one month from today.

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Patrick is a Christian with more than 28 years experience in professional writing, producing and marketing. His professional background also includes social media, reporting for broadcast television and the web, directing, videography and photography. He enjoys getting to know people over coffee and spending time with his dog.