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Years ago, a coworker bragged to me how his "tax guy" got him a huge refund. I told him my goal was to owe a couple thousand dollars, and that I'm glad I didn't have his guy.

In the end, your return should reflect the truth, and a good tax guy will be little better than good tax software. The bottom line is that a refund is money you lend the government, interest free. If you can owe a bit of money but avoid paying a penalty, you'll have gotten a free loan from Uncle Sam.

Given the fact that most (it seems that way, someone tell me if I'm wrong) families carry some balance on their credit cards, they are paying out 12% or more on their highest interest debt. Lending the government even $1000 for the year comes at a cost, if you file in time to get your refund by the end of March, that's an average 9 months you are out your money. 12%/yr is $90. Scale that up to $3000, the average refund, and the max 24% rate I've seen, $540 lost. Better to adjust your withholding, and get the extra money each paycheck to pay off other debt.

Obviously, for those with no debt, their cost is minimal, perhaps 1%, but still better in your pocket for the year.

If you pay in this money every paycheck, only to feel good getting it back every March or April, while paying 18% card interest every month, that's your choice. And Stevej will support that decision, or so it seems.

EDIT - The Huffpost article Steve linked titled "Big Tax Refunds Really Are Good" ignores this debt, only focusing on the near zero rate banks offer now. The article listed 8 reasons the author felt this way. By the way, the author is the "Chief Tax Officer, Jackson Hewitt Tax Service Inc" which makes him a bit less than a disinterested third party. And all 8 of his reasons are far from compelling. "In my opinion, getting a $3,000 check is never a bad thing." This was #1, and by now you know why I disagree. Next, "More than 75 percent of all individual taxpayers get refunds year after year. It has been this way for decades.... It is unlikely that 75 percent of all taxpayers are all making bad financial decisions every year." That's enough. Rhetorical nonsense. Read the rest for yourself and decide if the next 6 reasons are any more compelling. Keep in mind, sellers of tax software or services have backed themselves into a corner with the "largest refund" claims. I'm sympathetic to the fact that "we'll shoot for no refund at all, in fact, our goal is for you to owe just $100" will not be their next campaign.

Years ago, a coworker bragged to me how his "tax guy" got him a huge refund. I told him my goal was to owe a couple thousand dollars, and that I'm glad I didn't have his guy.

In the end, your return should reflect the truth, and a good tax guy will be little better than good tax software. The bottom line is that a refund is money you lend the government, interest free. If you can owe a bit of money but avoid paying a penalty, you'll have gotten a free loan from Uncle Sam.

Given the fact that most (it seems that way, someone tell me if I'm wrong) families carry some balance on their credit cards, they are paying out 12% or more on their highest interest debt. Lending the government even $1000 for the year comes at a cost, if you file in time to get your refund by the end of March, that's an average 9 months you are out your money. 12%/yr is $90. Scale that up to $3000, the average refund, and the max 24% rate I've seen, $540 lost. Better to adjust your withholding, and get the extra money each paycheck to pay off other debt.

Obviously, for those with no debt, their cost is minimal, perhaps 1%, but still better in your pocket for the year.

If you pay in this money every paycheck, only to feel good getting it back every March or April, while paying 18% card interest every month, that's your choice. And Stevej will support that decision, or so it seems.

EDIT - The Huffpost article Steve linked titled "Big Tax Refunds Really Are Good" ignores this debt, only focusing on the near zero rate banks offer now. The article listed 8 reasons the author felt this way. By the way, the author is the "Chief Tax Officer, Jackson Hewitt Tax Service Inc" which makes him a bit less than a disinterested third party. And all 8 of his reasons are far from compelling. "In my opinion, getting a $3,000 check is never a bad thing." This was #1, and by now you know why I disagree. Next, "More than 75 percent of all individual taxpayers get refunds year after year. It has been this way for decades.... It is unlikely that 75 percent of all taxpayers are all making bad financial decisions every year." That's enough. Rhetorical nonsense. Read the rest for yourself and decide if the next 6 reasons are any more compelling. Keep in mind, sellers of tax software or services have backed themselves into a corner with the "largest refund" claims. I'm sympathetic to the fact that "we'll shoot for no refund at all, in fact, our goal is for you to owe just $100" will not be their next campaign.

EDIT 2 - I gave this more thought as I started to write a near 1000 word post on this topic. I came to find that 1 in 4 employees did not deposit enough in their 401(k) to capture the full match. This is the highest lost opportunity as the potential return is an instant 100% for matched deposits. Again, it's easy to dismiss the near zero bank rates, but that's not the alternative best use for the money.

Years ago, a coworker bragged to me how his "tax guy" got him a huge refund. I told him my goal was to owe a couple thousand dollars, and that I'm glad I didn't have his guy.

In the end, your return should reflect the truth, and a good tax guy will be little better than good tax software. The bottom line is that a refund is money you lend the government, interest free. If you can owe a bit of money but avoid paying a penalty, you'll have gotten a free loan from Uncle Sam.

Given the fact that most (it seems that way, someone tell me if I'm wrong) families carry some balance on their credit cards, they are paying out 12% or more on their highest interest debt. Lending the government even $1000 for the year comes at a cost, if you file in time to get your refund by the end of March, that's an average 9 months you are out your money. 12%/yr is $90. Scale that up to $3000, the average refund, and the max 24% rate I've seen, $540 lost. Better to adjust your withholding, and get the extra money each paycheck to pay off other debt.

Obviously, for those with no debt, their cost is minimal, perhaps 1%, but still better in your pocket for the year.

The Huffpost article Steve linked ignores this debt, only focusing on the near zero rate banks offer now. If you pay in this money every paycheck, only to feel good getting it back every March or April, while paying 18% card interest every month, that's your choice. And Stevej will support that decision, or so it seems.

Years ago, a coworker bragged to me how his "tax guy" got him a huge refund. I told him my goal was to owe a couple thousand dollars, and that I'm glad I didn't have his guy.

In the end, your return should reflect the truth, and a good tax guy will be little better than good tax software. The bottom line is that a refund is money you lend the government, interest free. If you can owe a bit of money but avoid paying a penalty, you'll have gotten a free loan from Uncle Sam.

Given the fact that most (it seems that way, someone tell me if I'm wrong) families carry some balance on their credit cards, they are paying out 12% or more on their highest interest debt. Lending the government even $1000 for the year comes at a cost, if you file in time to get your refund by the end of March, that's an average 9 months you are out your money. 12%/yr is $90. Scale that up to $3000, the average refund, and the max 24% rate I've seen, $540 lost. Better to adjust your withholding, and get the extra money each paycheck to pay off other debt.

Obviously, for those with no debt, their cost is minimal, perhaps 1%, but still better in your pocket for the year.

If you pay in this money every paycheck, only to feel good getting it back every March or April, while paying 18% card interest every month, that's your choice. And Stevej will support that decision, or so it seems.

EDIT - The Huffpost article Steve linked titled "Big Tax Refunds Really Are Good" ignores this debt, only focusing on the near zero rate banks offer now. The article listed 8 reasons the author felt this way. By the way, the author is the "Chief Tax Officer, Jackson Hewitt Tax Service Inc" which makes him a bit less than a disinterested third party. And all 8 of his reasons are far from compelling. "In my opinion, getting a $3,000 check is never a bad thing." This was #1, and by now you know why I disagree. Next, "More than 75 percent of all individual taxpayers get refunds year after year. It has been this way for decades.... It is unlikely that 75 percent of all taxpayers are all making bad financial decisions every year." That's enough. Rhetorical nonsense. Read the rest for yourself and decide if the next 6 reasons are any more compelling. Keep in mind, sellers of tax software or services have backed themselves into a corner with the "largest refund" claims. I'm sympathetic to the fact that "we'll shoot for no refund at all, in fact, our goal is for you to owe just $100" will not be their next campaign.

Years ago, a coworker bragged to me how his "tax guy" got him a huge refund. I told him my goal was to owe a couple thousand dollars, and that I'm glad I didn't have his guy.

In the end, your return should reflect the truth, and a good tax guy will be little better than good tax software. The bottom line is that a refund is money you lend the government, interest free. If you can owe a bit of money but avoid paying a penalty, you'll have gotten a free loan from Uncle Sam.

Given the fact that most (it seems that way, someone tell me if I'm wrong) families carry some balance on their credit cards, they are paying out 12% or more on their highest interest debt. Lending the government even $1000 for the year comes at a cost, $120-$240 depending on the rate. Better to adjust your withholding, and get the extra money each paycheck to pay off other debt.

Obviously, for those with no debt, their cost is minimal, perhaps 1%, but still better in your pocket for the year.

Years ago, a coworker bragged to me how his "tax guy" got him a huge refund. I told him my goal was to owe a couple thousand dollars, and that I'm glad I didn't have his guy.

In the end, your return should reflect the truth, and a good tax guy will be little better than good tax software. The bottom line is that a refund is money you lend the government, interest free. If you can owe a bit of money but avoid paying a penalty, you'll have gotten a free loan from Uncle Sam.

Given the fact that most (it seems that way, someone tell me if I'm wrong) families carry some balance on their credit cards, they are paying out 12% or more on their highest interest debt. Lending the government even $1000 for the year comes at a cost, if you file in time to get your refund by the end of March, that's an average 9 months you are out your money. 12%/yr is $90. Scale that up to $3000, the average refund, and the max 24% rate I've seen, $540 lost. Better to adjust your withholding, and get the extra money each paycheck to pay off other debt.

Obviously, for those with no debt, their cost is minimal, perhaps 1%, but still better in your pocket for the year.

The Huffpost article Steve linked ignores this debt, only focusing on the near zero rate banks offer now. If you pay in this money every paycheck, only to feel good getting it back every March or April, while paying 18% card interest every month, that's your choice. And Stevej will support that decision, or so it seems.