Ho ho ho, ’tis the season. Tax season that is. I am far from a tax genius. In fact, I know almost nothing about the tax code. I don’t think anyone can call themselves a tax expert, considering the tax code itself is pretty darn convoluted. According to NPR, the US tax code is 67,204 pages. Assuming the average person can read one page per minute (which would be pretty tough with all the legal jargon included in the tax code), it would take a little over 46 days of consecutive reading to get from front to back. Do you think anyone has actually read the whole document? And if someone has, do you think they actually retained all they read? I think not my friends.
Every year I’ve earned an income, I have received a tax return between $200 to $1000. That wasn’t the case in 2009. I’m looking at a tax liability of $60 this go around. As a result, I’ve totally slacked off and am yet to file.
People often treat their tax return like a bonus. While many use their return money to pay down debt, add to savings, etc, others treat this as “blow” money and use it for clothing, flat screen TVs, or buying a year supply of tampons (maybe not so much that last one). What people tend to forget is that this tax return is not a bonus, but in fact a loan they made to the government (usually unintentionally) that they are finally getting reimbursed for. When’s the last time you loaned a “friend” a couple thousand dollars for a year at 0% interest? Probably never, so why do you do it for Uncle Sam?
If you know you are getting a return, it’s generally in your best interest to file as soon as you can. That way you get your money sooner, and have loaned it to the government for less time.
My goal for 2009 was to owe, or at least get back, as close to $0 as possible. As I mentioned earlier, this year I’ll be paying $60 to Uncle Sam. I love that I owe the IRS! That means I was able to get my hands on all my hard earned money as soon as I made it. I didn’t give the Fed one cent more than I needed, and I am okay with that.
Since I owe $60, I have not been in a big rush to cut a check to the IRS, but now that the deadline is only two weeks away, I guess it’s time to pay the tax man. I am going to try and follow the same plan for 2010, but getting hitched is gonna throw off my tax game and I’m not really sure what to expect. Usually marriage works to the tax payers advantage though, so I’m not too worried.
I personally think everyone should try and receive as small of a tax return as possible. Who really wants to loan the Fed free money? If nothing else, I guess it at least forces some people to unknowingly save a small part of their annual income, and I’ll never bash someone who saves. Just pinky promise me you wont go blow that return on something you can’t afford, okay? Thanks.
Now on to the questions…
Do you usually file your taxes ASAP, or wait until the last minute?
Do you end up getting a return each year, or do you typically owe?
Have you ever intentionally manipulated your W-4 to try and increase/decrease your tax return?
What is it about the return, that causes so many people to be okay with loaning the gov free money?
Anyone want to loan me interest free money for a year? I’ll be sure to pay you back