Recieved My 2007 Tax Refund
The final tally? A measly $107.
I couldn’t be happier.
By estimating my tax bill at the start of last year, I made sure to take an extra allowance. Doing so helped me minimize the amount of taxes paid during the year. That’s more money in my pocket instead of Uncle Sams. Its been said many times by many a PF blogger but it is worth repeating, a huge refund means you gave the government a hefty interest free loan. You are better off putting that money to good use during the year. If you follow a budget carefully enough, and as a reader of personal finance blogs I assume you do, you will come out ahead.
Worried about under paying? Its true that if you do underpay the IRS can fine you for your carelessness. It is important to note that there are exceptions that will waive any possible penalty if you have at least paid as much in taxes as your last tax return. This makes sense for the majority of us who receive pay raises on a semi regular annual basis.
The IRS has a special document, known as Publication 919, that helps you figure out the optimum withholding. Take a moment and see if your 2008 taxes could be adjusted. After all, you know better than the government how to spend you own money so keep more of it for yourself during the year.