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Are You Getting a BIG Tax Check?

September 19th, 2006 at 04:37 pm

Is getting a huge refund check really a good thing? Most people think that it is, but you need to stop looking at it as a big payout and begin viewing it from a different angle. When you get a huge refund that means you’ve been paying too much in taxes over the past year. This also means the government has been getting some good interest on your money. If you are receiving, or paying more than $500.00 a year on taxes, consider going to your payroll department to change your tax withholdings.

Example: if you were supposed to get a $2500.00 tax check, have your payroll department help you modify your tax withholdings so that you get an extra $208.33(2500/12) per month. After you change your tax withholdings, you put the additional money into your savings account (avg. of 5%), and at the end of the year you will receive an extra $75.00. Do yourself a favor and stop giving more money away than you have to.

Posted in Weekly Finance Tips | 2 Comments »

2 Responses to “ Are You Getting a BIG Tax Check?”

  1. Broken Arrow Says:
    September 19th, 2006 at 05:06 pm 1158685602
    1158685602

    Hehe, I agree, though fortunately, I think most people in this site are aware of it as well. It sure would be nice if the rest of the world "get it" as well.

  2. LdyFaile Says:
    September 19th, 2006 at 06:19 pm 1158689961
    1158689961

    I'm actually testing my theory this year about that. I know how much I generally get back just from what I've paid, before student loans come into play. That's one of the handy functions of using TurboTaxOnline, you get to see what alters your return. Anyway, in about April I changed my W4 from 1 to 2. The next check, I figured out what the difference was between what I used to get and what I'm getting now. That's a nice thing about being on Salary, same check every time. Took the amount I usually get back every year and divided it by the amount extra I'm now getting because of the W4 change. It came out to 9 months. So for the rest of the year, I'll stay at 2 and in January I'll change it back to 1. Then when I do my taxes, I'll find out how close I was to being right. And hopefully will be able to adjust accordingly.

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