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If you have a refund on the way from the IRS, you let Uncle Sam
use your money tax-free. To prevent this from happening again,
take the time to evaluate what you are paying in withholding or
estimated tax payments. If you find you are paying too much,
reduce your withholding by filing a new W-4 form with your
employer. Do not expect your employer to know what your tax
situation is and come to you. Don't use the IRS as a savings tool.
Many people enjoy getting a refund each year. This is the only way
to save money that you can be sure and not make anything with your
money. Use your refund to pay off credit cards or other debt with
high interest rates. If you had used the money you are getting as
a refund to pay the credit cards in the first place, you would
have saved let's say, $600 last year if you had a card with $3000
on it and your interest rate was 19%. Start paying debts with the
highest interest rate first.
While the IRS thanks you for your loan, improve your overall
financial health by giving yourself a financial check-up.
The articles are intended
to provide resources for the tax and accounting needs of small
businesses and individuals. The information contained in
this web site is intended to provide general information on
matters of interest in the areas of tax and accounting.
Users are encouraged to contact their own accountant regarding
specific situations. |
