Why Getting a Tax Refund Isn't Always the Best Situation
Friday, 22 March 2024, 12:30
Why Owing Taxes Isn't Necessarily Bad
A tax refund isn't free money. It is essentially the IRS returning your own money to you. It might be more advantageous to owe taxes as you can avoid giving Uncle Sam an interest-free loan.
Avoid Overspending by Owning Taxes
Keeping track of your earnings and accurate tax planning can help prevent surprises when tax season arrives. By saving a higher percentage of your income and utilizing high-yield savings accounts, you can earn interest on the extra money used to pay taxes.
Strategies to Minimize Tax Refunds
- Adjust your tax withholding to receive more income throughout the year
- If self-employed, save more than anticipated for taxes and consider earning interest on the funds in a savings account
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.