Are you excited to get your tax refund every year? I’m not.
A tax refund means in the previous year you overpaid the government taxes and they are refunding you the difference. However, if you would have adjusted your tax withholdings you would have instantly had that money to spend or invest instead of waiting for the government to issue you a refund.
For instance a tax refund of $7,500.00 means you overpaid your taxes by $625.00 a month during the previous year and a tax refund of $2,400.00 means you overpaid your taxes by $200.00 a month during the previous year. The government is glad to refund your tax overpayment but they don’t award you any interest on that overpayment. That overpayment would have been best served if used to pay off some debt, invest or save towards a purchase of a new home.
Talk to your tax advisor or lawyer to discuss how these small changes can lead to great rewards.
Jose A. Polanco
Attorney at Law