Why you don’t want a large tax refund
This controversial topic comes up every year
You don’t want a large tax refund and a lot of people argue with me on that one, but here’s why that’s the case.
When you get a large tax refund, it means you’re overpaying in taxes and often by a lot. So you should change your with holding.
You’re loaning Uncle Sam your money interest free and that doesn’t benefit you. That just means your money is being returned in a lump sum.
Don’t believe me? Let’s do the math.
The average tax refund in 2018 was $2, 787. If you get paid bi-monthly that’s $107.
If you get paid weekly that’s $53. So your paycheck swells a bit and you can use that money throughout the year for things like paying off credit card debt, building an emergency fund or paying an extra mortgage.
You can also use your fat refund check this year to invest in some budgeting software to make it so you can live without that fat burning check.
More: Money Monday section
Copyright 2020 by WDIV ClickOnDetroit - All rights reserved.